Udaan plans to go public in 12 to 18 months after raising $120 M from current investors
According to reports, the chief financial officer of Udaan informed staff that the business had raised $120 million in convertible notes and debt, with current owners and bondholders leading the charge. The business hopes to list on the public market in the next 12 to 18 months, according to the message.
With this round, Udaan will have raised more than $350 million using convertible notes and loans, making it one of the biggest structured instruments fundraises in the nation.
“Despite the funding-related challenges being experienced by the larger start-up ecosystem, this fundraise reflects the confidence of investors in our business model and their endorsement of the journey to unit economics, driven by great progress in the evolution of our business model and cost efficiency, that we initiated last year,” read the mail from Aditya Pande, chief financial officer at Udaan.
“These steps have not only helped us achieve positive unit economics last quarter but also improved efficiency in the system, with huge cost benefits, which is key to building a sustainable business,” he added.
According to the letter, the business plans to go public within the next 12 to 18 months.
The business raised $250 million in January of this year, including $50 million in debt and $200 million in convertible notes, or short-term financing that may be turned into stock.
In April of this year, Microsoft Corporation joined the organization’s fundraising efforts. Investors including M&G Prudential, Kaiser Permanente, Nomura, TOR, Arena Investors, Samena Capital, and Ishana Capital contributed to the $225 million round.
Amod Malviya, Sujeet Kumar, and Vaibhav Gupta, three former employees of Flipkart, founded Udaan in 2016. It provides a platform for traders, wholesalers, retailers, and manufacturers to connect, find customers, suppliers, and products across categories, and engage with one another directly for the best deals.
On its investor roster, the company has backers like Octahedron Capital, Moonstone Capital, Lightspeed Venture Partners, DST Global, GGV Capital, Altimeter Capital, and Tencent. It has so far raised more than $1.5 billion in stock and debt. In January 2021, it secured $280 million in an equity investment round. The corporate representative chose not to comment on the most recent debt increase.
According to Pande’s email to the staff, the company’s unit economics increased by almost 1000 basis points, while operational costs and gross margins also saw significant increases.
“The journey of right business design and unit economics has translated into more than 60% reduction in the burn,” it said. The firm reported that over the past two quarters, its monthly buyer repeats rates had improved by more than 500 bps.
