Udaan raises $340 mn with eye on listing in 12-18 months

• The funding round was led by M&G Plc with participation from Lightspeed Venture Partners and DST Global.
• The eB2B platform aims to turn profitable in the next 12-18 months.
• The eB2B market opportunity is as large as $100 billion, says Udaan CEO.
  

India’s largest eB2B platform Udaan said on Thursday that it has raised $340 million in Series E financing. The funding round was led by M&G Pls. Existing equity investors like Lightspeed Venture Partners and DST Global participated in the round. The fund raise is subject to regulatory approvals.

The funding includes a combination of fresh equity investment as well as the conversion of existing debt (convertible notes) into equity. The startup claims that it will strengthen its balance sheet. With this exercise, udaan’s business is fully funded, it said in a press release.

“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,” Vaibhav Gupta, co-founder and CEO, udaan.

It plans to use the freshly raised funds to strengthen its customer experience, market penetration, strategic vendor partnerships, and to reinforce long-term capabilities of supply-chain and credit.

Bejul Somaia, partner, Lightspeed Venture Partners, said, "We believe this financing puts the company on an extremely strong financial footing and on course to further improve profitability while empowering small businesses across Bharat.”

Founded in 2016, the platform has operations across lifestyle, electronics, home & kitchen, staples, fruits & vegetables, FMCG, pharma, toys and general merchandise. It has over 3 million retailers and thousands of sellers on the platform, and delivers to over 1,200 cities.

It also enables financial products and services to small businesses, manufacturers, and retailers and more. Over the last 12 months, it claims to have seen strong and steady validation of its multi-category cluster-anchored business strategy.

“The regional-operated design will not only get us closer to our customers, but also make our operations more agile and efficient. We are committed, as ever, to our mission to empower small businesses of Bharat, while unlocking a uniquely Indian and huge $100 Bn eB2B market opportunity,” said Gupta.

Over the past two years, udaan claims to have achieved consistent progress on its sustainability agenda with eight consecutive quarters of improving profitability.

“Our investment strategy aligns with udaan’s ambition to simplify and increase efficiency in a congested B2B market,” said Niranjan Sirdeshpande, (EMEA) Director, M&G Catalyst.