Saturday, May 18, 2024

JSW One Platforms to seek NBFC licence

Japan’s Mitsui & Co.-backed business-to-business (B2B) e-commerce startup JSW One Platforms is set to apply for a non-banking financial company (NBFC) licence, chief executive Gaurav Sachdev said on Monday.

In an interview, Sachdev said the company would look to capitalize on its large base of micro, small and medium enterprises (MSMEs) for the NBFC.

“We have created our own subsidiary – JSW One Finance Ltd and filing for our NBFC licence. As on date, all capital will come from the parent. We may look at getting a partner at a later stage,” he said.

JSW One Platforms caters to the building material needs of industrial and construction MSMEs in India. The company also operates a turn-key home construction business called JSW One Homes.

Earlier in the day, JSW One Platforms announced raising 205 crore from Mitsui in a Series A round at a valuation of more than 2,750 crore. “The company needs capital as we expand our footprint in providing credit to manufacturing and construction industries. This capital will go into building logistics, technology and our NBFC arm,” Sachdev said.

JSW One Platforms achieved a gross merchandise value (GMV) of 3,000 crore by the end of last fiscal, which it did in 22 months since inception, and claims that it was the fastest by any startup company in the country in the infrastructure space.

Industry data, sourced from various filings to the government, showed it took four years by startups like Zetwerk (which started in 2018 and was impacted by Covid and lockdowns), five years by and seven years by Moglix.

Sachdev said there is enough opportunity for the business to achieve $1 billion GMV by the end of this fiscal.

“This financial year (2023-24), we target to reach $1 billion GMV. We have so much captive commerce on our platform. We have MSME purchase history on our platform. We have dealers, distributors and they have experience of dealing with these customers for a significant period of time. Our ability to underwrite trade credit is significantly higher and technology is helping us to do this,” he said.

On the availability of funds for the venture, Sachdev said the company had initially received 250 crore from the parent and it has not utilized even half of it, yet. “The parent group also announced they will invest 4,000 crore in the venture and, hence, there is enough funds with us,” he said. He further said that the entry of Mitsui should be seen more as strategic and less for funds. “They have a significant footprint in the iron and steel industry, chemical industry, trading materials for all parts of manufacturing construction supply chain. When we started working with them, we wanted to get them as a significant partner. We will collaborate on Mitsui expertise on trading material… as we expand, there will be more ways to collaborate,” he said.

He further added that the company needs partners, who are long-term, and will continue to partner with funds and corporates, who can work with the company for the long term.

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