This would probably be the second largest secondary deal in the new-age sector this year after a $200 million share sale in Lenskart.
Zodius Capital has bagged more than $100 million in returns on its initial $8 million investment in OfBusiness in late 2016, said Gautam Patel, cofounder of the venture capital fund, confirming the exit. He is also the founder and managing partner at venture fund Z3Partners.
Zodius had made its maiden investment in OfBusiness at a $50 million valuation. Zodius was acquired by KKR-backed Avendus Capital in 2017.
“Over the past few months, Zodius has made a complete exit from OfBusiness. This is one of the biggest outcomes for them from an early investment,” a person aware of the matter said.
Zodius’ stake was largely sold to a group of high-net-worth individuals (HNIs) and family offices, sources said.
Discover the stories of your interest
Z47 (formerly Matrix India Partners), an early investor in SoftBank-backed OfBusiness, is also looking to sell its stake worth at least $50-60 million, people in the know said. The venture fund, which holds a 0.8% stake as per Tracxn data, is in talks with multiple secondaries-focused funds like TR Capital and Oister Tribe Ace Fund to sell stake in the Gurgaon-based firm which has plans for an IPO next year.Z47 is also in the market to sell stakes in a bunch of its portfolio firms including fintech Razorpay, mobility startup Ola, content aggregation platform Dailyhunt, among others, as reported first by ET on October 10.
For OfBusiness — which was last valued at $5 billion — the latest deal has been struck at a valuation of around $4 billion while for the Z47 transaction the valuation may slightly increase as the contours are being finalised, one of the persons involved said.
OfBusiness CEO Asish Mohapatra declined to comment on the secondary share sale. Z47, TR Capital and Oister Tribe Ace Fund didn’t respond to ET’s emails seeking comment.
Oister Tribe Ace Fund is a recently set up secondary deal-focussed fund with Oister Global — which has backed private market funds across venture capital, growth equity and private equity — and the India arm of Silicon Valley VC firm Tribe Capital that has invested in fintech Jar, logistics startup Shiprocket and others.
These transactions are taking place when the company has also firmed up plans for an IPO. A Reuters report, citing OfBusiness chief financial officer Bhavesh Keswani, said last month that the company intends to launch an IPO of between $750 million and $1 billion.
New AI venture?
Meanwhile, one of the company’s cofounders, Nitin Jain, is exploring setting up a new venture in the artificial intelligence space, even as discussions are underway on his role at OfBusiness as he has held discussions with investors on the new startup idea, people aware of the matter said.
Both Mohapatra and Jain said they are likely to invest in the new AI startup but Jain is not leaving OfBusiness, which is backed also by Alpha Wave Global.
Industry sources said Jain has been meeting investors discussing potential launch plans and the financing needs for it. Ruchi Kalra, Vasant Sridhar and Bhuvan Gupta are the other cofounders of OfBusiness.
The company posted a 30% rise in consolidated net profit in FY24 at nearly Rs 603 crore compared with Rs 463.25 crore in the previous fiscal year. Operating revenue grew 26% to Rs 19,296.27 crore.
OfBusiness has made as many as 19 acquisitions over the past two years in sectors like steel, agricultural produce, metals and manufacturing.
Oxyzo, the lending arm of OfBusiness, was spun off in March 2022 and raised external funding of $200 million from Tiger Global, Alpha Wave Global and Matrix Partners India at a valuation of over $1 billion. OfBusiness owns an around 70% stake in Oxyzo, which is run by Kalra.
This unit posted Rs 903 crore in operating revenue for FY24, up 59% on year. Its net profit rose 47% to Rs 290 crore, from Rs 197 crore in FY23.