Udaan eyes profitability ahead of IPO in 12-18 months; secures $340 million in funding
The round was led by London-headquartered investment company M&G with participation from venture capital firms Lightspeed Venture Partners and DST Global
- Dec 14, 2023,
- Updated Dec 14, 2023 7:09 PM IST
In one of the largest start-up fundraises of the year, business-to-business e-commerce firm Udaan has secured $340 million in a mix of equity and convertible notes. The round was led by London-headquartered investment company M&G with participation from venture capital firms Lightspeed Venture Partners and DST Global.
The company said the fundraise will support its goal of achieving profitability and preparing for the public market within the next 12-18 months.
“Series E round strengthens our balance sheet and fully funds our business plan. It enables our continued journey of growth and profitability, positioning us well to be public-market ready in the next 12-18 months. The regional-operated design will not only get us closer to our customers, but also make our operations more agile and efficient,” Vaibhav Gupta, Co-founder and CEO, Udaan, said.
According to a report from Entrackr, Udaan’s losses narrowed 33.7 per cent to Rs 2,076 crore in FY23 from Rs 3,132 crore in FY22. The company also witnessed its gross revenue decline 43.1 per cent to Rs 5,629 crore in FY23 from Rs 9,900 crore in FY22.
Udaan’s funding round stands out as one of the notable raises in 2023, amid a challenging environment for late-stage start-ups seeking growth capital. Notable exceptions include PhonePe, owned by Walmart, and Lenskart, which secured $850 million and $600 million in tranches, respectively.
Udaan said it will use the fresh capital to strengthen customer experience, market penetration, strategic vendor partnerships, and to reinforce long-term capabilities of supply-chain and credit, with.
“We believe it (Udaan) has the right operational platform to be the trusted partner of scale to small businesses across India by empowering them with technology, financial inclusivity, and supply chain capabilities. Our investment strategy aligns with Udaan’s ambition to simplify and increase efficiency in a congested B2B market,” Niranjan Sirdeshpande, (EMEA) Director, M&G Catalyst, said.
As per the company, it shipped over 1.7 billion products catering to over 22 million orders to 1200 towns and cities in 2022. Under the essentials category (fresh, FMCG, staples, pharma), the platform catered to 17 million orders and over 9 lakh tonnes of products were shipped while 131 million products were shipped under discretionary (electronics, general merchandise, and lifestyle) category catering to 2.5 million orders. As per the company, 586 sellers on the platform achieved sales worth Rs 1 crore each in 2022, while 174 sellers did business worth INR 2 crores on the platform.
Last year, the Bengaluru-based company raised $120 million in convertible notes and debt.
In one of the largest start-up fundraises of the year, business-to-business e-commerce firm Udaan has secured $340 million in a mix of equity and convertible notes. The round was led by London-headquartered investment company M&G with participation from venture capital firms Lightspeed Venture Partners and DST Global.
The company said the fundraise will support its goal of achieving profitability and preparing for the public market within the next 12-18 months.
“Series E round strengthens our balance sheet and fully funds our business plan. It enables our continued journey of growth and profitability, positioning us well to be public-market ready in the next 12-18 months. The regional-operated design will not only get us closer to our customers, but also make our operations more agile and efficient,” Vaibhav Gupta, Co-founder and CEO, Udaan, said.
According to a report from Entrackr, Udaan’s losses narrowed 33.7 per cent to Rs 2,076 crore in FY23 from Rs 3,132 crore in FY22. The company also witnessed its gross revenue decline 43.1 per cent to Rs 5,629 crore in FY23 from Rs 9,900 crore in FY22.
Udaan’s funding round stands out as one of the notable raises in 2023, amid a challenging environment for late-stage start-ups seeking growth capital. Notable exceptions include PhonePe, owned by Walmart, and Lenskart, which secured $850 million and $600 million in tranches, respectively.
Udaan said it will use the fresh capital to strengthen customer experience, market penetration, strategic vendor partnerships, and to reinforce long-term capabilities of supply-chain and credit, with.
“We believe it (Udaan) has the right operational platform to be the trusted partner of scale to small businesses across India by empowering them with technology, financial inclusivity, and supply chain capabilities. Our investment strategy aligns with Udaan’s ambition to simplify and increase efficiency in a congested B2B market,” Niranjan Sirdeshpande, (EMEA) Director, M&G Catalyst, said.
As per the company, it shipped over 1.7 billion products catering to over 22 million orders to 1200 towns and cities in 2022. Under the essentials category (fresh, FMCG, staples, pharma), the platform catered to 17 million orders and over 9 lakh tonnes of products were shipped while 131 million products were shipped under discretionary (electronics, general merchandise, and lifestyle) category catering to 2.5 million orders. As per the company, 586 sellers on the platform achieved sales worth Rs 1 crore each in 2022, while 174 sellers did business worth INR 2 crores on the platform.
Last year, the Bengaluru-based company raised $120 million in convertible notes and debt.