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December 14, 2023
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Udaan secures $340M, sets sights on profits before anticipated IPO.

Key Points:

  • Indian business-to-business e-commerce company, Udaan has secured funding worth $340 million, in a mix of equity and convertible notes.
  • The round was led by London-based investment company M&G, alongside venture capital firms DST Global and Lightspeed Venture Partners.
  • The funding will be used to aid the company in attaining profitability, while also preparing for a public offering in the next 12-18 months.

In one of the largest start-up fundraising rounds of the year, Udaan, an Indian business-to-business e-commerce firm, has secured $340 million in a round that combined equity with convertible notes. The round of investment was led by London-headquartered investment company M&G, with participation from venture capital firms Lightspeed Venture Partners and DST Global.

CEO and co-founder, Vaibhav Gupta, explains that the Series E funding round will fully fund the company’s business plan, putting it on the path to profitability, while also preparing it for the public market within the next 12 to 18 months. The newly minted funds will enhance the company’s ongoing growth, making operations much more agile and efficient.

This funding round comes on the back of news that Udaan’s losses diminished by 33.7% to Rs 2,076 crore in FY23, from Rs 3,132 crore in the previous year. Despite this, the company’s gross revenue witnessed a decline of 43.1% to Rs 5,629 crore in FY23, from Rs 9,900 crore in FY22.

The fresh capital injection will be used to enhance the customer experience and boost the company’s market penetration. The firm also intends to forge strategic vendor partnerships while reinforcing the long-term capabilities of its supply chain and credit services. In a challenging environment for late-stage startups seeking growth capital, Udaan’s funding round emerges as one of the year’s notable raises.

According to the firm’s 2022 data, it shipped more than 1.7 billion products through over 22 million orders to 1200 towns and cities. Under the essentials category, the platform catered to 17 million orders, which saw over 9 lakh tonnes of products shipped. In their discretionary category, 131 million products were shipped, catering to 2.5 million orders.

Selling successfully on their platform, 586 sellers achieved sales worth Rs 1 crore each in 2022, while 174 sellers did a business reach of INR 2 crores.

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