B2B e-commerce unicorn Udaan raises $120 mn, ready to go public in 12-18 months

Amid a funding crunch in the start-up ecosystem, B2B e-commerce company Udaan has raised $120 million in convertible notes and debt led by existing shareholders and bondholders, according to an internal email accessed by Business Today. 
 
With this, the total funding raised by the e-commerce unicorn in convertible notes and debt stands at $300 million, the company’s Chief Financial Officer, Aditya Pande wrote in the email. 
 
The email also highlighted some of the numbers Udaan has managed to reach including improving unit economics by ~ 1,000 bps with efficiencies in both gross margins and operating costs.

“The journey of right business design and unit economics has translated into a 60 per cent + reduction in burn. Continued focus on customer-first thinking & initiatives on strengthening our value proposition for them have resulted in monthly buyer repeat rates increasing by 500+bps in the last 2 quarters,” Pande said. 
 
He also added, “With your support, we will continue to invest to build Udaan as a professionally run organisation with scale, capabilities and resilience that can leverage the huge opportunity that Kirana commerce offers, while empowering the small businesses of Bharat.”
 
Pande noted that with this milestone the company is ready for public listing in the next 12-18 months. 
 
Udaan’s spokesperson confirmed the email and issued a statement to TechCrunch in which he wrote, “Despite the funding related challenges being experienced by the larger start-up ecosystem, this fund raise reflects the confidence of investors in our business model and their endorsement of the journey to unit economics, driven by great progress in evolution of our business model and cost efficiency, that we initiated last year.”

While Udaan’s valuation post the fund-raise has not been mentioned, the unicorn was valued at $3.1 billion as on January 5, 2022 according to market research platform Tracxn and is backed by 22 investors including the likes of Lightspeed Ventures, GGV Capital, and more. 

Udaan was founded in 2016 by former Flipkart executives, Sujeet Kumar, Amod Malviya, and Vaibhav Gupta. It achieved the unicorn status just two years later in 2018. Udaan is a one-stop solution for wholesalers, distributors, producers, and the small retail shop owners for carrying out their-day-to-day business. The Bengaluru-based company claims to have 3 million active users on its platform expanding across 1,200 cities. 

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