Companies
IPO-bound OfBusiness set to offer $100 million in partial exits to Alpha Wave, Z47 Partners
Summary
- The planned exit comes as OfBusiness gears up for a $750 million-$1 billion IPO, at a valuation of $6–$9 billion. Following the transaction, Alpha Wave and Z47 Partners will retain about 90% of their respective stakes. Alpha Wave currently holds an 18% share, while Z47 Partners owns nearly 10%.
MUMBAI : Alpha Wave Global and Z47 Partners (formerly Matrix Partners India) - two major investors in business-to-business (B2B) marketplace OfBusiness, are set to make partial exits worth $100 million in six to nine months, as the company prepares for its public listing later this year, co-founder and CEO Asish Mohapatra said.
The shares will be sold to high net worth individuals (HNIs) and family offices, Mohapatra told Mint, without disclosing details about the buyers.
“Our strategy has largely been to introduce small institutional investors and HNIs into the cap table, almost as a pre-IPO [initial public offering] offering," Mohapatra said.
Following the transaction, Alpha Wave and Z47 Partners will retain about 90% of their respective stakes. According to the latest available data, Alpha Wave Global currently holds an 18% share, while Z47 Partners, an early backer, owns approximately 10%.
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This development follows a $100–$120 million secondary share sale in October, during which early investor Zodius Capital fully exited, selling its stake to HNIs and family offices. OfBusiness has also facilitated ₹100 crore in employee stock option plan (ESOP) liquidations ahead of the IPO.
The SoftBank-backed company has appointed five investment banks, including Axis Capital, Morgan Stanley, and JPMorgan, to manage its IPO, which is expected to raise $750 million to $1 billion. The IPO will have a $200 million fresh issue and the rest offer-for-sale component, targeting a valuation of $6–$9 billion, reports have said.
Mohapatra acknowledged that recent stock market corrections could temper valuations, but expressed optimism about the company’s prospects. "Has valuation in our heads moved by about 15% from what we thought they could be, yes, but we are not listing right now. We are going down the line. And who knows what would happen post the budget or post the financial year end," he said.
Founded in 2015 by husband-wife duo Asish Mohapatra and Ruchi Kalra, OfBusiness has raised over $800 million to date. Its last funding round in 2021 valued the company at $5 billion.
Growth and expansion
OfBusiness operates in three key verticals—industrials, apparels, and metals—providing raw material procurement for manufacturing and infrastructure sectors. Its financing arm, Oxyzo Financial Services, offers working capital and term loans to SMEs in these sectors.
In FY24, OfBusiness reported a 30% increase in consolidated net profit, reaching ₹603 crore, up from ₹463.25 crore the previous year. Operating revenue grew 26% to ₹19,296.27 crore during the same period.
The company is investing ₹2,000– ₹4,000 crore over the next three years in newer segments like aluminium, copper, zinc, and polymers. These newer ventures, launched in the past two years, currently contribute 25% of revenue and 5% of profit, with growth rates of up to 40%.
Existing businesses are growing at around 20%, Mohapatra said.
Meanwhile, Oxyzo is projected to grow revenues by 30% annually over the next three years, requiring ₹9,000– ₹10,000 crore in additional capital, he said. To fund it, Mohapatra plans to raise about $150-200 million in a primary round, while the rest would be funded by debt.
The entity, spun off in 2016, raised $201 million from Alpha Wave, Tiger Global and Norwest Venture Partners, among others, in its first external funding round, valuing it at over $1 billion. A separate listing for Oxyzo is reportedly under consideration.
OfBusiness competes with the likes of Infra.Market (construction solutions), Moglix (industrial supplies), and Zetwerk (custom manufacturing) in the B2B e-commerce market. Bengaluru-based Zetwerk has also reportedly picked banks for a potential $500 million IPO.
Read this | Small investments surge as new wave of angel investors enters startup scene, seeking lucrative returns
According to a report by Statista, B2B e-commerce that was valued at $5.6 billion in 2021, is likely to grow to $60 billion in 2025.
New ventures
This month, OfBusiness launched Nexizo.AI, a platform aimed at identifying new business opportunities, providing market insights, and fuelling B2B commerce. Revenue from Nexizo.AI comes from subscriptions and lead generation.
The subscription revenue on an ARR basis is close to $1.5 million ( ₹12-13 crore), as per the company.
“We've made additions over the last three years, and the next two to three years will be focused on consolidation. Our goal is to ensure all our products are available in all our geographies and that every geography has access to all our products. During this period, we don't plan to add many new product lines or expand into many new geographies," Mohapatra added.
Investor trends in pre-IPO market
“Over the past three to four years, public markets have delivered substantial returns, significantly enhancing investor portfolios. This robust performance has enabled HNIs and family offices to diversify their investments by allocating more capital to private market opportunities, for higher returns and portfolio diversification," said Rajmohan Krishnan, principal founder and managing director at Entrust Family Office.
Shashank Randev, head of Investments at Randev Ventures Family Office, observed a shift among third- and fourth-generation family office members actively pursuing pre-IPO investments.
