Profitability Over Cash Burn: Lessons from OfBusiness for India’s New Entrepreneurs

In the last decade, India’s startup ecosystem has exploded with unicorns—companies valued at over $1 billion. But behind the glitter of unicorn valuations lies a harsh reality: many of these businesses are built on burning cash rather than generating profits. Their financials show mounting losses, quarter after quarter, while they chase market share and investor hype.

The logic seems simple on the surface: spend aggressively, acquire customers fast, and hope that profitability comes later. But for many businesses, “later” never arrives. The cycle of cash burn and fundraising often leads to unsustainable operations, layoffs, or even closures.

Yet, there are rare companies proving that growth and profitability are not mutually exclusive. One standout example is OfBusiness, a B2B platform serving India’s micro, small, and medium enterprises (MSMEs). Unlike its peers, OfBusiness has chosen a disciplined path—focusing on profitability from day one while still scaling rapidly. Its story offers invaluable lessons for India’s new generation of entrepreneurs.

Why Cash Burning is Not a Sustainable Strategy

Burning cash may create short-term growth, but it often masks structural weaknesses. Consider a few examples from India’s startup landscape:

  • E-commerce giants have spent billions in discounts and marketing to attract customers. Yet, even after years, many still struggle to achieve consistent profitability because customer loyalty remains low once discounts vanish.
  • Food delivery platforms built their early growth by offering subsidies on every order. While user adoption soared, the economics of paying customers to eat food proved unsustainable, leading to constant fundraising cycles.
  • Edtech companies invested heavily in sales teams and promotions, but as demand normalized, many faced massive losses and had to downsize.

The common thread? These businesses prioritized valuation over value creation. Cash burn might win market share temporarily, but without a path to profitability, it erodes investor confidence and endangers long-term survival.

OfBusiness: A Different Growth Story

Founded in 2015 by Ashish Mahapatra and his team, OfBusiness decided to take a road less traveled. Instead of chasing consumer glamour, they focused on the industrial raw material supply chain, serving India’s massive MSME sector—which contributes nearly 30% of the country’s GDP.

OfBusiness offers a simple but powerful proposition:

  1. Provide MSMEs with raw material procurement at competitive prices.
  2. Offer working capital financing alongside procurement to ensure smooth operations.
  3. Leverage technology for transparency in an otherwise opaque ecosystem.

The results speak for themselves: in FY24, OfBusiness crossed ₹19,000 crore in revenue with over ₹600 crore in net profit—a rare feat in the Indian startup space. Its valuation now exceeds $5 billion, but unlike most unicorns, it is backed by sustainable profits, not mounting losses.

What Entrepreneurs Can Learn from OfBusiness

1. Solve Real and Persistent Problems

OfBusiness didn’t chase trends. It identified the structural pain points of MSMEs: inconsistent raw material supply, lack of financing, and opaque pricing. By solving these, it created a product customers genuinely need.

Don’t just follow what’s fashionable. Find long-term, recurring problems in your sector and build reliable solutions.

2. Build Profitability Into the DNA

Unlike many startups that postpone profits indefinitely, OfBusiness designed its model around sustainable margins. It ensured strict credit underwriting, maintained NPAs below 1%, and exercised rigorous cost control.

Profitability is not something to think about later—it must be baked into your model from day one.

3. Innovate Customer Acquisition Without Burning Cash

Instead of spending crores on ads, OfBusiness created BidAssist, an AI-powered tool that helps MSMEs discover government tenders. Over 20 lakh MSMEs joined organically through this tool, making it one of the most efficient growth strategies in India’s B2B space.

Focus on creative, low-cost acquisition strategies that provide real value. Growth should not come at the expense of draining resources.

4. Use Technology to Build Trust

MSMEs often rely on informal, trust-based networks. OfBusiness used technology to bring transparency to procurement, offering shipment tracking, supplier verification, and fair pricing. This built confidence and long-term customer loyalty.

Technology should not only automate processes—it should also strengthen relationships and reduce friction

5. Diversify Within Your Core Competence

OfBusiness didn’t diversify randomly. It expanded into manufacturing and processing—areas closely linked to its procurement business. This not only increased margins but also made customers more dependent on its ecosystem.

Diversify only into adjacent areas that enhance your core value proposition. Random expansion can dilute focus, but strategic expansion deepens loyalty.

6. Execute with Discipline

Operational excellence is often ignored in the rush to scale. OfBusiness invested in rigorous supplier checks, standardized logistics, and disciplined collections. Its success lies as much in execution rigor as in its business idea.

A great idea fails without disciplined execution. Operational excellence is a competitive advantage in itself.

The Bigger Picture: Rethinking Startup Growth in India

The Indian startup ecosystem has matured, and investors are increasingly asking: “Where is the path to profitability?” Unicorn status without sustainable profits is no longer celebrated as it once was.

For new entrepreneurs, the key takeaway is clear: valuation without value is hollow. Building a profitable business may take longer and seem less glamorous initially, but it creates durability, investor trust, and long-term impact.

OfBusiness’s story shows that startups don’t need to choose between scale and profit. With the right model, it is possible to achieve both.

Final Thoughts: A Blueprint for New Entrepreneurs

Cash burn may create noise, but it rarely builds lasting companies. OfBusiness has proven that focusing on customer needs, disciplined profitability, and smart innovation can create not just a unicorn, but a resilient and profitable business.

For every aspiring entrepreneur, the lessons are clear:

  • Solve meaningful problems.
  • Prioritize profits over hype.
  • Grow with discipline, not desperation.
  • Use technology as a bridge, not a crutch.
  • Diversify strategically.

In the end, building a business is not about burning cash—it’s about creating real value that sustains itself. OfBusiness is a shining example that India’s next generation of entrepreneurs can follow to build not just unicorns, but enduring companies that matter.

 

Scroll to Top