Behind 26 months to Unicorn status was 8 years of grit and hardwork - Udaan Co-founder Sujeet Kumar
“When I was in Flipkart, I took delivery to 500 cities; and my city was not one of those,” says Udaan Co-founder Sujeet Kumar on how small his hometown is. His B2B ecommerce company has been in the news for all the right reasons - it is India's fastest unicorn, having achieved the coveted $1 billion valuation in a short 26 months.
At the 9th edition of TechSparks, the calm and very charming Sujeet gives the audience a glimpse of what passion, hard work, and drive can do. The young man from Bhabua, Bihar, shies away from the praise he gets, but is honest in telling all he did not make it to the UPSC exam - not once, but twice.
“It isn’t a journey of how we achieved unicorn status. Behind the 26 months, there was eight years of different people’s efforts,” says the IIT Delhi alumnus.
Founded in late 2015 by ex-Flipkart executives, commonly know as ex-Flipsters, Udaan is a B2B marketplace that connects manufacturers and wholesalers with retailers online. At Flipkart, for eight years Sujeet built operations, supply chain and logistics, while his Udaan Co-founders Amod Malviya was the CTO, and Vaibhav Gupta, was senior VP.
Why startup the second time?
Through their talk, Shradha Sharma, Founder and CEO, YourStory, asks what everyone wants to know - “You had a good exit (with Flipkart), why did you start again?” Pat comes the reply - "It is not about money, it is about wanting to make more money," amid laughter and cheer from the crowd.
On a more serious note, he adds that after exiting Flipkart, there was no plan of starting up. The trio turned angel investors, and Sujeet also consulted with Tiger Global for three months helping the investor’s portfolio companies.
“I realised I was a person of execution. Every time I would consult with the portfolio company on execution I would feel I should execute it. Then I thought I needed to start again. We nailed down B2B ecommerce in India because it is a unique proposition where 50 million small businesses are there with an easy internet play and yet it is hard to execute.”
While most are trying to connect people in the B2B space, that is only one part of the problem, says Sujeet, adding transactions and service credit were others. “Therefore, while Udaan is an open marketplace, we are ensuring logistics for every transaction, if there is a need for credit we provide the same as well,” he says.
The B2B opportunity
Startups are increasingly focusing on the large, and largely unorganised, enterprise and small businesses market. A study by industry body Nasscom in 2017 revealed that 40 percent of Indian startups are focused on the business-to-business segment. This, of course, includes pure tech companies, especially in the SaaS domain.
In ecommerce, too, there is a shift towards B2B commerce. This could be because the B2C space already has massive marketplaces in the form of Flipkart, Amazon and Paytm Mall. The B2B segment still has many opportunities, despite early players like Power2SME being present in this category.
In late 2016, Sujeet, Amod and Vaibhav launched the beta version of Udaan. They announced a Series A fund-raise of $10 million at the same time. Lightspeed led the funding. The company saw a wider launch in June 2017, but was still curating users. A few weeks ago, it raised $225 million led by Yuri Miller’s DST Global.
As of February this year, the company delivered to over 500 cities, and picks up from sellers in over 80 cities through third party logistics. Even while it works with third-party logistics firms, Udaan keeps control over the experience as it owns the tech platform. It also offers order management, accounting, and payment management solutions to merchants on the platform.
Bringing the speed up
“Our experience, and the execution efforts we put in at Flipkart helped. We focussed on building teams fast, a lot of people who were a part of Flipkart heard that we were starting, and came onboard. At day zero, we had strong founding team. And that is super important. Then we focussed on system thinking how to scale tech, how to build processes.”
The team saw that on the supply chain side, if they had to build a big company, they would have to solve the supply chain and operations problem in totality. “At Flipkart we had realised if we didn’t scale up our supply chain and operations, our last mile delivery we couldn’t be successful. That conviction got us to build everything,” says Sujeet.
It was the same pattern that they choose to build with Udaan - focus on solving the entire problem.
Working on a larger problem
Having built the operations and supply chains in Flipkart, Sujeet stayed at the background, but founding a startup puts one in the limelight.
“When we were building Flipkart, we got our high not from the limelight but from customer recognition. We were building scale. That was motivating us. Even in Udaan, there has been only three news pieces that have gone out, and everytime it has been during our fundraise - Series A, B and C. It is the first time I am talking on this,” says Sujeet.
On how Udaan has grown, Sujeet says rather than giving people discounts and incentives to come on to the platform, the co-founders focussed on predictability, as it is the most important thing in B2B.
"Buyers want credit with the transaction, and in any new relation, nobody wants to give credit. We were solving the problem. If you see on the platform, buyers and sellers can solve the problem of underwriting. We are relevant for buyers and sellers. The latter wants to sell to more people and buyer wants more selection, quality and price and credit and as a platform we are solving that, and that is why its growing,” says Sujeet.
Execution, he explains, works on how clear one is about the problem statement. He adds he is open to working with startups, collaborating, and perhaps even investing in them.
“We don’t build everything in-house we do partner, collaborate and work with different startups and entrepreneurs. Udaan is solving credit underwriting problem, B2B logistics, payment and sales and marketing, wherever there is a synergy, we work together.”
YourStory's annual extravaganza TechSparks brings together the best and the brightest from the startup ecosystem, corporate world, policy makers, and of course, the investor community. Over the years, it has grown to become India's most loved tech and startup platform for knowledge sharing and networking. The ninth edition of TechSparks also marks YourStory's 10th anniversary. A big thank you for all your support over the years and keep reading and watching YourStory.