Sector: B2B E-commerce (Raw Material Procurement and Business Financing)
Founded: 2015
Valuation: $5 billion (2021)

Company Overview: Founded in 2015, OfBusiness is a B2B platform that provides procurement solutions and financing options to small and medium enterprises (SMEs) in manufacturing, construction, and infrastructure sectors. The company provides procurement solutions for raw materials such as steel, chemicals, and other industrial goods, along with credit and working capital financing. It addresses both their procurement and working capital needs with a valuation of ~$3 billion by 2021.

Challenges encountered:

• Difficulty in assessing the creditworthiness of SMEs due to lack of traditional financial data.
• High borrowing costs for SMEs, limiting growth opportunities.
• Complex procurement process, leading to inefficiencies and higher costs for SMEs.
• Ensuring SMEs get access to the right financial products to meet their unique working capital needs.

Solutions Implemented:

• Data-Driven Credit Assessment: Introduced a data-driven credit scoring model that integrates procurement data and transaction history to assess SME creditworthiness.
• Diversified Financing: Suggested the introduction of structured financing options such as supply chain financing, reducing SMEs' borrowing costs.
• Streamlined Procurement: Implemented bulk buying partnerships with raw material suppliers, reducing procurement costs for SMEs by leveraging economies of scale.
• The company raised $160 million from SoftBank, helping it scale its financial services and expand its procurement offerings to a broader base of SMEs.

Outcomes Attained:

• Improved credit risk management resulted in a lower default rate.
• Reduced borrowing costs allowed SMEs to access cheaper credit, enhancing growth potential.
• Streamlined procurement improved operational efficiency and lowered material costs for SMEs, contributing to OfBusiness’ growth to unicorn status.