Udaan announced a successful fundraising round, securing an impressive $340 million. The funding effort was spearheaded by UK-based M&G Prudential, with continued support from existing investors such as Lightspeed Venture Partners and DST Global, marking a significant endorsement of Udaan’s strategic vision.
While Udaan refrained from disclosing its current valuation, industry insiders speculate that the funding round might signal a down round, potentially slipping below the $2 billion mark. Talks between Udaan and M&G Prudential initiated on October 20, with the initial target set at over $400 million for this round.
The funding infusion, a combination of fresh equity and the conversion of existing debt, particularly convertible notes, underscores Udaan’s proactive financial management. Notably, investors who previously backed Udaan through convertible notes, including M&G Prudential, will witness the complete conversion of debt into equity during this round.
Founded by former Flipkart executives Vaibhav Gupta, Amod Malviya, and Sujeet Kumar, Udaan strategically employed convertible notes early on to shield its valuation during a challenging funding climate in India. The Series E funding follows Udaan’s 2021 equity round, where it raised $285 million and attained a valuation of $3.2 billion, demonstrating the company’s resilience and adaptability to market dynamics.
Vaibhav Gupta, CEO of Udaan, emphasized the importance of the Series E round, stating, “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.”
Facing economic headwinds and a tightening liquidity market, Udaan strategically scaled down operations, with co-founders Amod Malviya and Sujeet Kumar stepping away from day-to-day activities. The company, which reached a peak gross merchandise value (GMV) run-rate of around $4 billion post-pandemic, is now operating at an annualized GMV run-rate between $1 billion and $1.5 billion. This adjustment aligns with Udaan’s renewed focus on profitability and fiscal responsibility.
Niranjan Sirdeshpande, Director for EMEA at M&G Prudential, expressed the fund’s commitment to supporting Udaan’s pursuit of a profitable growth strategy. He stated, “We believe it (Udaan) has the right operational platform to be the trusted partner of scale to small businesses across India, by empowering them with technology, financial inclusivity, and supply chain capabilities.”
Since its inception in 2016, Udaan has successfully raised more than $1 billion in equity funding, solidifying its position as a key player in the Indian B2B e-commerce sector. The successful Series E funding, coupled with Udaan’s strategic operational shifts, positions the company for sustained growth and profitability, instilling confidence in its potential public market entry within the next 12-18 months.
In a broader financial context, Trustroot Internet, the Singapore-based parent company of Udaan, reported a 43% decrease in gross revenue to Rs 5,629 crore for the fiscal year ending March 2023. Simultaneously, the company’s losses reduced from Rs 3,123 crore in FY22 to Rs 2,075 crore in the latest fiscal year, signaling positive trends in financial performance.
