What the business is
OfBusiness is a B2B marketplace selling steel and other raw materials to SMEs, with credit via its unicorn subsidiary Oxyzo
The bet
That vertical integration — owning SMW Ispat's Wardha plant and beneficiation capacity — would control the steel supply chain and ramp up steel sales on its marketplace
Starting capital
$325M raised at a $5B valuation from SoftBank, Tiger Global and Alpha Wave; SMW Ispat purchase price undisclosed
How it started
Founded in 2016 by Asish Mohapatra, Bhuvan Gupta and Ruchi Kalra, OfBusiness sells steel and non-ferrous raw materials to SMEs through its online marketplace and offline channels, and lends for infrastructure and raw-material purchases via Oxyzo.
What happened
OfBusiness applied for competition approval in March 2022; the Competition Commission of India cleared OFB Tech's purchase of a 100% stake in SMW Ispat in May 2022. The company reported FY21 net profit up 50% year-on-year at INR 19.76 crore and operating revenue up 97% at INR 1,379 crore, and cofounder Vasant Sridhar said its businesses had grown 3x over the last year.
What has to be true
A marketplace that also owns production guarantees inventory and margins in a commodity business where supply is the moat.
SMW Ispat's plant and beneficiation capacity give OfBusiness steel it can sell on-platform without negotiating every tonne.
Infra.Market's rise in the same construction materials showed the winner would be whoever controlled supply, not just demand.
SME credit via Oxyzo plus owned supply creates a closed loop: finance the purchase, sell the material, make the material.
What can be applied
When a marketplace's moat is supply, buying the factory beats aggregating suppliers — control beats brokerage.
Aftermath
As of 19 May 2022 the CCI had cleared the 100% acquisition, adding SMW Ispat's Wardha plant and Sangam TMT brand to OFB Tech. Integration results and the purchase price were not reported.
FOLLOW THE EVIDENCE