The ₹41,000 Crore Unicorn You NEVER Heard Of | GrowthX Wireframe

Summary

Off Business, founded by Ashish Mahapatra, has revolutionized the B2B sector by addressing the challenges faced by MSMEs in India. The company offers a platform that provides suppliers with timely payments, visibility on end customers, and access to a wide customer base. For MSMEs, it solves issues related to shipment tracking, raw material quality, and offers favorable credit terms. With a focus on low NPAs and innovative customer acquisition strategies, Off Business has successfully built a profitable empire, becoming a billion-dollar company while also creating a separate NBFC, Oxxi, to cater to financing needs.

Takeaways

• 😀 Off Business has achieved significant revenue, outperforming competitors like Zera, Zato, and Lenscart by substantial margins.
• 💼 Founded by Ashish Mahapatra, who left a high-paying VC job to start the company, Off Business has grown rapidly in the B2B sector.
• 🌟 The company focuses on the MSME B2B sector, which contributes 30% to India's GDP and employs over 100 million people.
• 🔍 Off Business excels in understanding customer patterns and the value chain, which is crucial for success in the complex MSME industry.
• 💡 They identified key problems in the raw materials supply chain and addressed them by providing solutions like timely payments and increased visibility for suppliers.
• 🚚 Off Business acts as a platform that streamlines the supply chain, offering better credit terms and reducing the frequency of delays and quality issues for SMEs.
• 🏦 They created a separate NBFC called Oxxi to provide financing and credit services, which has become a significant part of their business.
• 📉 Off Business has managed to keep their non-performing assets (NPAs) at less than 1%, showcasing their effective underwriting and collection processes.
• 📈 They expanded their business model by entering manufacturing and processing, similar to Amazon's strategy with Amazon Basics, to capture higher margins.
• 🆓 Off Business achieved zero customer acquisition costs by creating a tool called Bid Assist, which helps SMEs find and apply for government tenders, thus attracting customers organically.

Q & A

What is the name of the B2B giant discussed in the script?

The B2B giant discussed in the script is OFB (Of Business).

What was Ashish Mahapatra's profession before founding OFB?

Before founding OFB, Ashish Mahapatra was working as a high-paying VC (Venture Capitalist) at Matrix Partners.

What is the significance of the MSME sector in India's economy?

The MSME sector in India is significant as it contributes almost 30% to India's GDP and provides employment to more than 110 million people.

Why did Ashish choose the raw materials category for OFB's business model?

Ashish chose the raw materials category because of the higher frequency of capital turns, which makes it a sustainable business despite having lower margins compared to other categories.

How does the credit cycle work in the MSME industry?

In the MSME industry, the credit cycle works on a 'buy now, pay later' basis, where businesses get a credit line of 30 days to pay back for the raw materials purchased.

What are the three major problems that suppliers face in the MSME industry?

The three major problems suppliers face are the need for timely payments, lack of visibility on end customers, and limited access to a certain level of traders and SMEs.

How does OFB address the issue of tracking shipments and real-time delivery for SMEs?

OFB addresses this issue by acting as a platform that facilitates easy tracking, similar to package tracking on Amazon, and maintains a high on-time delivery rate.

What is the role of Oxido in OFB's ecosystem?

Oxido is a separate NBFC (Non-Banking Financial Company) created by OFB to cater to multiple lending solutions for their clients.

How does OFB achieve a low NPA (Non-Performing Asset) rate?

OFB achieves a low NPA rate by focusing on underwriting and collection processes, lending only to companies with a minimum revenue of 20 crores and a certain level of creditworthiness.

What is the 'Amazon of B2B' strategy that OFB employs?

The 'Amazon of B2B' strategy refers to OFB's approach of adding value to the business by entering manufacturing and processing, similar to how Amazon started manufacturing their own products under Amazon Basics.

How does OFB achieve zero customer acquisition cost?

OFB achieves zero customer acquisition cost by creating a customer acquisition tool called Bid Assist, which helps SMEs find and analyze government tenders, and by leveraging their financing services to gain referrals from suppliers.