Exclusive: Udaan Gets Shareholders' Nod To Raise INR 2,000 Cr In Debt

Udaan Likely To Raise A Downround, Valuation May Dip Below $2 Bn

SUMMARY

Udaan can raise upto INR 2,000 Cr by allotting NCD by way of private placement, in one or more tranches to any category of investors in one year

Development comes after FMCG companies such as Amul, Parle and others have stopped direct supply to Udaan

Udaan last raised $280 Mn in funding from Octahedron Capital and Moonstone Capital and others at a valuation of $3.1 Bn

B2B ecommerce marketplace Udaan has received its shareholders approval for raising upto INR 2,000 Cr by allotting NCDs (Non-Convertible Debentures). According to the RoC filings accessed by Inc42, the specific terms of each offer/issue of NCDs will be decided from time to time within the period of one year from the date of the resolution passed (10th September).

The development comes almost a month after TOI reported that Udaan might be looking to raise debt funds from global investors in the period of 12 to 14 months.

Founded in 2016 by former Flipkart employees Sujeet Kumar, Vaibhav Gupta and Amod Malviya, Udaan claims to connect small and medium size businesses, manufacturers, wholesalers, traders and retailers to sell goods and other services.

The startup claims that it has over 5 lakh product categories ranging from electronics and appliances to footwear and medicines on its platform. The startup boasts of having over 30 lakh retailers, more than 25K sellers and is operational in 900 cities in the country.

The Bengaluru-based startup last raised $280 Mn in funding from Octahedron Capital and Moonstone Capital, Lightspeed Venture Partners, DST Global, GGV Capital, Altimeter Capital, and Tencent at a valuation of $3.1 Bn in January this year.

The startup also became one of the fastest startups to achieve the unicorn status in 2018 after it bagged a $225 Mn funding round from DST Global and Lightspeed Venture Partners’ global fund.

Udaan is among India’s five B2B ecommerce marketplace startups that have managed to enter the celebrated unicorn club. Others in the clubs are Zetwerk, Infra.Market, Moglix and OfBusiness. As per media reports, Udaan is likely to hit the public market and is planning to go for an initial public offering in the next 2 years.

Recently the company was in the news, after major FMCG Indian brands Amul, Parle and other FMCG brands stopped its direct supply to Udaan. As per media reports, FMCG companies such as the Gujarat Cooperative Milk Marketing Federation Ltd (or Amul) and Mohanlal Dayal Chauhan-founded Parle among others have alleged that Udaan is trying to monopolise distribution to retailers.

RS Sodhi, managing director of Amul had then told ET that Amul has over 10,000 exclusive distributors or small enterprises and if Udaan is doing distribution itself, then it is competing with Amul’s exclusive distributors and hurting them.

The startup has dragged Parle to India’s anti-trust regulator the Competitive Commission of India alleging that it is facing a competitive setback due to Parle refusing to directly supply its highly demanded products “without any objective justification”.

Udaan back then stated that it has tried to hold discussion with Parle in the last 2 years to work out a direct supply deal in a fair and justified manner, but Parle has apparently continued to discriminate.

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