Udaan, a business-to-business e-commerce firm, has raised $340 million in a mix of equity and convertible notes in one of the year's largest start-up fundraisers. M&G, based in London, led the transaction, including participation from venture capital companies Lightspeed Venture Partners and DST Global. The financing will help the company achieve profitability and prepare for the public market in the next 12-18 months, according to the company.
"The Series E round fortifies our balance sheet and completely funds our business plan." It allows us to continue on our path of growth and profitability, putting us in a good position to go public in the next 12-18 months. "The regional-operated design will not only bring us closer to our customers, but it will also make our operations more agile and efficient," Udaan Co-founder and CEO Vaibhav Gupta stated.
According to Entrackr, Udaan's losses decreased 33.7 percent in FY23 to Rs 2,076 crore from Rs 3,132 crore in FY22. In addition, the company's overall sales fell 43.1 percent to Rs 5,629 crore in FY23 from Rs 9,900 crore in FY22.
In a tough climate for late-stage start-ups seeking growth financing, Udaan's funding round stands out as one of the major fundraisers in 2023. PhonePe, which is owned by Walmart, and Lenskart, which received $850 million and $600 million in tranches, respectively, are notable exceptions. Udaan stated that it will use the new money to improve customer experience, market penetration, key vendor collaborations, and to develop long-term supply-chain and credit capabilities.
"We believe it (Udaan) has the right operational platform to be a trusted scale partner to small businesses across India by providing them with technology, financial inclusion, and supply chain capabilities." "Our investment strategy aligns with Udaan's goal of simplifying and increasing efficiency in a crowded B2B market," stated Niranjan Sirdeshpande, (EMEA) Director, M&G Catalyst.
According to the corporation, it will supply over 1.7 billion products to 1200 towns and cities in 2022, fulfilling over 22 million orders. The platform catered to 17 million orders in the essentials category (fresh, FMCG, staples, and pharma) and shipped over 9 lakh tonnes of products, while 131 million products were shipped in the discretionary (electronics, general merchandise, and lifestyle) category, which catered to 2.5 million orders. According to the company, 586 merchants on the site made Rs 1 crore in sales in 2022, while 174 sellers did business worth INR 2 crores on the platform. The Bengaluru-based startup raised $120 million in convertible notes and debt last year.
