Udaan Bags $250 Mn Through Convertible Note And Debt

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

SUMMARY

As per internal communication mail accessed by Inc42, Udaan has raised $200 Mn via convertible note which was oversubscribed 2X

With this round, Udaan has raised a total of $250 Mn in just the last quarter of 2021 including a debt round

Udaan is likely to head for a domestic IPO in next 12-18 months

Bengalauru-based B2B ecommerce giant Udaan has raised $250 Mn in a fresh round of funding. The B2B unicorn has raised $200 Mn through convertible note and $50 Mn through debt.

A convertible note is an instrument typically used by companies at pre-IPO stage, and the instrument converts into equity at the IPO. Large scale tech companies that have successfully used convertible notes include Airbnb, Uber, Spotify, Robinhood among others.

According to an internal communication shared with the team, Udaan has seen participation from 5 new investors in this round and its convertible note round was oversubscribed 2X.

Inc42 could not independently identify names of these investors. Detailed questionnaire shared with Udaan on the new funding round has elicited no response.

“This round was oversubscribed 2x and also saw participation from our existing investors, including those who bought into the company through the secondary (ESOP) round in H1 2021,” Udaan’s CFO Aditya Pande said in the internal mail.

He further added that with this round, Udaan has started building a complete new muscle in its finance function which will continue to strengthen as it goes forward.

With this round, Udaan has raised a total of $250 Mn in just the last quarter of 2021 including a debt round.

In the calendar year of 2021, the IPO-bound Udaan has raised over $500 Mn, taking the total fundraise to $1.4 Bn.

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 to have a network of 25,000 sellers across the country offering over 5 lakh product categories. Udaan is operational in 900 cities.

As per people close to the company, Udaan is likely to go for a domestic listing in the next 12-18 months. Udaan is among a handful of Indian startups such as Ola, Swiggy, BYJU’s, and Flipkart who have shown their interest for public listing but are yet to file their prospectus.

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