Udaan Raises $340 Mn In Series E Funding

SUMMARY

The Series E funding round included a combination of fresh equity investment and the conversion of existing debt into equity

While Udaan didn’t mention the post-money valuation, media reports earlier said the funding round would be a down round at a valuation under $2 Bn

The funding round comes months after Udaan conducted a major restructuring of its operations

Bengaluru-based B2B ecommerce unicorn Udaan has raised $340 Mn in its Series E funding round led by UK-based savings and investment firm M&G Prudential, with participation from existing investors Lightspeed Venture Partners and DST Global.

The Series E funding round included a combination of fresh equity investment and the conversion of existing debt (convertible notes) into equity.

“Udaan plans to use these funds to further strengthen customer experience, market penetration, and strategic vendor partnerships, and to reinforce long-term supply chain and credit capabilities,” the B2B unicorn said.

The unicorn said in a statement that the funding round is subject to regulatory approvals.

Earlier, media reports said in October that Udaan was in talks with M&G Prudential to lead an equity round. However, the reports said that the round was going to be a down round, with the startup likely to raise funding at a valuation of under $2 Bn.

Udaan did not mention its post-money valuation and the fresh equity infusion in the statement.

In January last year, Udaan raised a $200 Mn debt financing round by issuing convertible notes to five new investors, including Tor Investment, Arena Investors and M&G.

Meanwhile, in the statement issued today, Udaan said it is well-funded and on course to hit profitability in the next 12-18 months, by when it is also aiming to go public.

Vaibhav Gupta, cofounder and CEO of Udaan, said, “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 get us closer to our customers and make our operations more agile and efficient.”

The funding round comes a few months after the startup conducted a major restructuring of its operations. This September, Udaan merged the Essentials business, comprising FMCG, staples, and pharma categories, with the Discretionary business, which includes general merchandise, lifestyle, and electronics categories.

Talking about its new strategy, Udaan said it has seen ‘strong and steady validation’ of its multi-category cluster-anchored business strategy. “The company is now reinforcing it with a regional cluster-led operating organisation that enables strong execution capabilities, while promoting ownership and accountability at the regional level, to drive sustainable growth,” it added.

In FY23, the B2B ecommerce unicorn saw its operating revenue shrink by 43% to INR 5,609 Cr from INR 9,897.3 Cr in the year prior.

Founded in 2016 by Gupta, Sujeet Kumar, and Amod Malviya, Udaan enables supply chain and logistics operations focused on B2B trade. It claims to enable daily delivery across over 1,000 cities and 12,500 pin codes through udaanExpress.

Udaan has raised $1.8 Bn in funding and counts the likes of Lightspeed, Microsoft, and Tencent among its backers.