Udaan secures $340Mn in Series E round

Udaan, the B2B e-commerce unicorn, has closed a Series E funding round, raising an impressive $340 million, ahead of a potential IPO, that seems to have been delayed further. The funding was led by M&G’s investment arm, and included the participation from existing investors Lightspeed Venture Partners and DST Global. The recent funding round incorporates both fresh equity investment and the conversion of existing debt, particularly in the form of convertible notes, into equity.

While the Bengaluru-based Udaan remains discreet about its current valuation, industry analysts speculate potential adjustments due to prevailing macroeconomic uncertainties. Still, the Series E funding catapults Udaan into a fully funded status, strategically positioning it against formidable competitors in India’s dynamic B2B e-commerce landscape.

Udaan has outlined a comprehensive strategy for the utilization of the proceeds of the newly-closed funding round. A substantial portion is earmarked for fortifying customer experience, exploring untapped markets, establishing robust vendor partnerships, and amplifying its supply-chain capabilities. Furthermore, the startup will ensure the allocation of funds to expand its loan book as well. To date, Udaan has raised over $1.5 billion against equity and through debt, and this funding round marks its first funding round with equity since 2021.

“(The) 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,” Vaibhav Gupta, co-founder and CEO of Udaan, commented on the matter.

“We are extremely excited to continue supporting udaan as it further strengthens its leadership as India’s largest EB2B marketplace. We believe this financing puts the company on an extremely strong financial footing and on course to further improve profitability while empowering small businesses across Bharat,” said Bejul Somaia, Partner, Lightspeed Venture Partners.

Founded in 2016 by by three former Flipkart executives, Udaan has consistently pivoted towards sustainability and improved profitability. Today, it claims to have reach more than 1,200 cities across the country for daily delivery, as well as over 12,500 zip codes through a of supply chain system. The Series E funding also serves as a financial fulcrum, aiding Udaan’s mission to empower small businesses across the country and exploit the substantial $100 billion eB2B market opportunity unique to India.

Looking ahead, Udaan is envisioning a transition to a public-market entity within the next 12-18 months, signaling a potential initial public offering (IPO) in 2025. The timeline seems to have been pushed further, considering the company has repeatedly talked about an IPO for past few years, but has resorted to private fundraising. In 2022, it raised nearly $320 in convertibles and debt., adding on to the recent capital infusion in Series E.