Udaan, an eB2B platform based in Bengaluru, has raised ₹300 crore in debt financing from Lighthouse Canton, Stride Ventures, InnoVen Capital, and Trifecta Capital.
Besides strengthening its balance sheet, the company plans to use the funds to scale its geographical footprint through its ‘micro-market strategy’, which creates a small, geographically confined area, typically including a single or a group of PIN codes.
This funding round marks another strategic step for Udaan as it advances its goal of profitability and market expansion. With the fresh capital, Udaan plans to intensify its ‘Micro-Market strategy,’ focusing on expanding its geographical reach and deepening buyer engagement across key regions.
It will also use the funds to enhance its ‘Go-to-Market’ (GTM) plans, streamline the supply chain, invest in opening new Micro-fulfilment Centres (MFCs), and elevate the service delivery experience. Udaan claims to have a 70% market share in India as it operates across categories including FMCG, staples, fruits and vegetables, and pharma.
“The latest round of debt funding highlights investor confidence in Udaan’s business model and the significant potential of the Indian eB2B market. It’s an endorsement of the consistent quarter-on-quarter growth achieved over the past ten quarters through various ‘customer-first’ initiatives. This funding will further strengthen our financial position, enabling us to double down on key strategic initiatives, such as expanding our cluster model to drive operational excellence, and to continue on our path to profitability while solidifying our market position,” noted Kiran Thadimarri, Senior Vice President, Group Finance, Udaan.
Co-founded in 2016 by former Flipkart executives Sujeet Kumar, Amod Malviya and Vaibhav Gupta and it is backed by Microsoft and Tencent, among other investors.
Udaan now serves over 3 million retailers across 900 cities, solidifying its position as a crucial player in India’s eB2B landscape.
This round follows Udaan’s $340-million Series E funding round in December last year, led by UK-based M&G. Since then Udaan has focused on efficiency, leading to a 30% reduction in EBITDA burn. The platform has seen a 60% revenue boost and a 50% increase in daily active buyers this year, reinforcing its growth trajectory.
The company added that its gross margins have improved by 200 basis points and contribution margins by 300 basis points year-to-date, alongside a 20% increase in buyer wallet share and monthly repeat ratio of over 90%.
While the company is yet to disclose its FY24 financials, in FY23 its revenue from operations declined by 43% year-on-year to ₹5,609.3 crore, while losses also shrank by about 34% to ₹2,076 crore from ₹3,132 crore a year ago.
