SoftBank-backed OfBusiness defers IPO plans by 3 months on weak market cues

Asish Mohapatra, OfBusiness co-founder & CEO (Image: Moneycontrol)

SoftBank-backed OfBusiness, which runs an online marketplace for construction materials and financing for small and medium enterprises, has put off by at least three months its plans to go public following the global market meltdown, CEO Asish Mohapatra has said.

OfBusiness, which also counts Matrix Partners and Falcon Edge among its backers, had planned an initial public offering (IPO) by the end of 2022 but may now get listed in the first quarter of the calendar year 2023, he said.

“Had the recent meltdown not happened, I think we were hoping to see ourselves on the public bourses in about six to nine months, and I think that has got extended by three to four months,” Mohapatra said during CNN-News18's Bits to Billions show.

“It (the original deadline for an IPO) would have been December (2022) or January (2023), that’s when we were thinking, now may be add a quarter to it. I think at our scale, we can’t stay away (from public markets) for too long now,” Mohapatra added.

He also said the round raised in December 2021 was OfBusiness’s last private market fundraise.

OfBusiness raised $325 million as a part of its Series G funding round led by Falcon Edge, Tiger Global, SoftBank, Norwest Venture Partners, and Matrix Partners, among others. The round valued the company at close to $5 billion.

Mohapatra said Oxyzo Financial Services, a company that started as a lending arm of OfBusiness and is promoted by his wife Ruchi Kalra, would go for an IPO six to 12 months after OfBusiness gets listed.

The husband-wife duo created history by promoting two unicorns—OfBusiness and Oxyzo—when Oxyzo pocketed $200 million at $1 billion valuation in its Series A round earlier this year. It was one of India’s largest Series A rounds that saw participation from Tiger Global and Falcon Edge among others.

“Both companies will independently go (for) IPO and the process of demerging out Oxyzo on a standalone basis will be there. Obviously, we have some milestones in our mind as in a billion-dollar book as well as growth in the fee income but there will be similar timelines for an IPO, but obviously, there will be some gap (six to 12 months),” Oxyzo CEO Ruchi Kalra said.

OfBusiness has joined a growing list of late-stage unicorns in India to defer IPO plans amid weak market conditions.

Hospitality firm Oyo, online pharmacy Pharmeasy and e-commerce player Snapdeal had filed draft documents with the Securities and Exchange Board of India (Sebi) in 2021, but have not gone ahead with their IPOs yet.

OfBusiness’ decision to defer its public issue comes at a time when many unicorns, including Unacademy, Vedantu, Byju’s, PineLabs, Meesho and Cars24, are looking to launc IPOs over the next 12-24 months.

For private market institutional investors like SoftBank, the delay in IPOs of unicorns suggests more pain as these companies typically exit either partially or fully during IPOs.

Other than OfBusiness, SoftBank is a major investor in Oyo, Unacademy, Meesho and Cars24. The Japanese investment conglomerate reported a record loss of $23 billion for the quarter ended June 30, as its listed holdings fell sharply during the quarter.

SoftBank recently organised a meeting between some of its top unicorns and India's biggest mutual fund managers in Bengaluru to discuss business progress and understanding public market investors better, as these startups prepare for public listing.