B2B e-commerce Udaan in discussion to raise upto $250 M in new round: Report

People with knowledge of the situation told the media that business-to-business e-commerce company Udaan is in discussions to raise $200-250 million in an internal round.

“Lightspeed and other internal investors have been contemplating to put $200-250 million equity capital in Udaan,” said one of the sources. “The terms of the deal are being finalised and may get completed in a few weeks from now.”

For the Bengaluru-based company, which has primarily raised money through debt and convertible notes for the past couple of years, the equity round comes after a lapse of 30 months. In January 2021, Udaan raised $280 million in an extended Series D round and has since raised more than $350 million in debt and convertible notes on its own.

Sources claim that Udaan has been working hard for some time to raise equity capital.

“Valuation is the key point of negotiation at the moment and Udaan may see a sharp haircut in its value in this round,” said another source who also wished not to be named. “It could be valued anywhere between $1 to $1.5 billion.”

In the most recent equity round, the company was valued at over $3 billion. Additionally, the Bengaluru-based business also submitted a report in September 2019 in which it valued itself at $7.5 billion.

Undoubtedly, the terms of the funding are still being discussed.

Udaan has bled copiously since it was created, similar to other unicorns. The company’s scale (gross revenue) increased by 66.8% to Rs 9,900 in FY22 from Rs 5,934 crore in the prior fiscal year (FY21). During that time, the company’s losses exceeded Rs 3,000 crore. Udaan has not yet submitted its FY23 financial numbers that have been audited.

Around 500 employees were let go by Udaan in two phases last year as well. But according to the company, these layoffs were the result of a drive to increase efficiency rather than a sign of financial frugality.