B2B ecommerce unicorn Udaan, based in Bengaluru, has raised $340 million in its Series E funding round, which was spearheaded by M&G Prudential, a savings and investment firm based in the UK. Existing investors Lightspeed Venture Partners and DST Global have also contributed to the round.
A combination of new equity investments and the conversion of outstanding debt (convertible notes) into equity were included in the Series E funding round.
“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 fundraising round is contingent upon regulatory approvals, the unicorn stated in a statement.
Prior to this, October media reports claimed that Udaan was in discussions to lead an equity round with M&G Prudential. The round, according to the reports, was expected to be a down round, with the startup most likely raising money at a valuation of less than $2 billion.
Both the new equity infusion and Udaan’s post-money valuation were left out of the statement.
Udaan raised $200 million in debt financing in January of last year by issuing convertible notes to five new investors, including M&G, Tor Investment, and Arena Investors.
In the meantime, Udaan stated in its statement released today that it is well-funded and expected to become profitable within the next 12 to 18 months, at which point it plans 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 startup underwent a significant operational restructure a few months before this funding round. Udaan combined the Discretionary business, which includes general merchandise, lifestyle, and electronics categories, with the FMCG, staples, and pharmaceutical categories that make up the Essentials business this September.
Talking about its new strategy, Udaan said it has seen ‘strong and steady validation’ of its multi-category cluster-anchored business strategy. “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.
Gupta, Sujeet Kumar, and Amod Malviya founded Udaan in 2016 to facilitate supply chain and logistics activities centered on business-to-business trade. Through udaanExpress, it promises to facilitate daily delivery across more than 1,000 cities and 12,500 pin codes.
With $1.8 billion in funding raised, Udaan has investors including Lightspeed, Microsoft, and Tencent.
