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The new capital brings Udaan’s total funding to date to US$1.15 billion.
Indian Business-to-Business (B2B) ecommerce startup Udaan announced on January 6 that it has raised US$280 million in additional financing from existing investors Lightspeed Venture Partners, DST Global, GGV Capital, Altimeter Capital, and Tencent and two new investors – Octahedron Capital and Moonstone Capital.
As part of its Series D financing round, the Bangalore-based startup had earlier raised $585 million from Tencent, Altimeter, Footpath Ventures, Hillhouse, GGV Capital, and Citi Ventures. Early last year, the company had also raised $30 million from Singapore-based parent company Trustroot Internet.
The new capital is an extension of its Series D, bringing its total funding to date to $1.15 billion. The company is currently valued at over $3.1 billion, according to TechCrunch.
In a press release, Amod Malviya, co-founder of Udaan, stated that the COVID-19 pandemic highlighted the “unique structure of Indian economy,” with millions of small businesses and mom-and-pop shops becoming “the lifeline of our country at the time of crisis.”
Malviya added that Udaan, which has emerged in the last four years as one of the largest ecommerce platforms in India, is at the forefront of this uniquely Indian ecommerce opportunity. “This financing enables us to further our journey of taking ecommerce to the depth and breadth of the country, with Udaan’s unique low-cost model for core middle India.”
In April, Udaan’s monthly gross merchandise value (GMV) had plummeted by over 70%. The same month, the company had laid off an estimated 10%-15% of its contractual staff (approximately 3,000-3,500 contract-based employees). Udaan had also drawn considerable flak on social media for terminating the contracts through a single email, without prior intimation or reason.
However, with lockdowns amid the pandemic, a slew of retailers and brands moved to online B2B platforms, and by July, Udaan’s GMV in categories such as fashion and electronics products had climbed back to around 80% of pre-COVID-19 levels.
“All the major supply hubs like Mumbai, Delhi, Calcutta, Chennai are in virtual lockdown so retailers in tier II and below have become very dependent on us,” Co-founder Sujeet Kumar had said. “For manufacturers and brands, their traditional distribution channels have gone for a toss. The brands that were earlier showing resistance are coming to our platform by themselves.”
With this, Udaan’s food category, which comprises around 60% of its business in B2B e-commerce, witnessed transaction volumes crossing 8,000 tons per day.
The startup said that the fresh round of funding will be used towards the expansion of the selection of products and categories available on Udaan. In addition, the fund will also be utilized to further user experience, enhance the technology platform, expand SME financing capabilities, and reinforce supply chain infrastructure.
“Participation of existing and new investors in this financing highlights the increasing recognition of capital markets of this unique nature of the Indian market, and the opportunity it offers,” Malviya said. “It also reflects the long-term truly transformative and fundamental value creation potential that udaan platform offers for the lives and businesses of Indian MSMEs, who are major job creators and form the backbone of our economy and the society.”
One of India’s most highly-valued and highly-funded startups, Udaan became a unicorn within 26 months of its official launch in June 2017, after it concluded its Series C round of funding in August 2019 to reach a valuation of $1 billion.
Co-founded by three former Flipkart executives, Udaan connects small or medium-sized businesses (SMBs) with wholesalers, traders, and retailers to sell goods and services. It functions across lifestyle, electronics, home and kitchen, staples, fruits and vegetables, FMCG, pharma, toys and general merchandise, serving over 25,000 sellers and over 3 million users in 900 cities.
Header image courtesy of Udaan.