Udaan, a B2B ecommerce unicorn headquartered in Bengaluru, has secured $340 million in its Series E funding round. The funding was spearheaded by M&G Prudential, a savings and investment firm based in the UK, and saw continued participation from Lightspeed Venture Partners and DST Global, existing investors in the company.
In the Series E funding round, a blend of new equity investment and the conversion of existing debt (convertible notes) into equity took place.
“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 mentioned in a statement that regulatory approvals are required for the funding round.
Earlier, media reports in October suggested that Udaan was in discussions with M&G Prudential to lead an equity round. However, these reports indicated that the round was likely to be a down round, with the startup poised to secure funding at a valuation below $2 billion.
In its statement, Udaan did not disclose details regarding its post-money valuation or the amount of fresh equity infusion.
In January last year, Udaan raised $200 million through a debt financing round by issuing convertible notes to five new investors, among them Tor Investment, Arena Investors, and M&G.
Meanwhile, in today’s issued statement, Udaan said it is well-funded and on course to achieve profitability in the next 12-18 months, during which 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 follows a significant restructuring of its operations conducted by the startup a few months ago. In September, Udaan integrated the Essentials business, encompassing FMCG, staples, and pharma categories, with the Discretionary business, covering general merchandise, lifestyle, and electronics categories.
Discussing its new strategy, Udaan mentioned that it has observed ‘robust and consistent validation’ of its business approach centered around multi-category clusters.
“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 experienced a 43% decrease in its operating revenue, contracting from INR 9,897.3 Cr in the previous year to INR 5,609 Cr.
Established in 2016 by Gupta, Sujeet Kumar, and Amod Malviya, Udaan facilitates supply chain and logistics operations with a focus on B2B trade. It asserts its ability to facilitate daily deliveries spanning over 1,000 cities and 12,500 pin codes through udaanExpress.
Udaan has secured $1.8 billion in funding, with support from backers such as Lightspeed, Microsoft, and Tencent.