[The Turning Point] 5 years on, here’s a look at what led 3 former Flipsters to launch B2B ecommerce startup Udaan

The Turning Point is a series of short articles that focuses on the moment when an entrepreneur hit upon their winning idea. Today, we look at Bengaluru-based B2B ecommerce startup Udaan, which completed five years of operations this week.
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“What a journey this has been!” wrote Amod Malviya, Sujeet Kumar, and Vaibhav Gupta, the Co-founders of Udaan, in an internal email sent to the company’s employees as this week marked five years of operations of the B2B ecommerce company.

The idea was to enable B2B transactions by bringing together all participants, including the wholesaler, distributor, producer, and the small retail shop owner, onto a single platform, such as a smartphone app. That idea is now a reality, and Udaan is using technology to solve the problems of millions of small businesses across India.

“We are well on track to become India's largest commerce platform, not just the biggest ecommerce platform," wrote the co-founders in the email, a copy of which YourStory has seen.

Udaan has operations across categories, including lifestyle, electronics, home & kitchen, staples, fruits & vegetables, FMCG, pharma, toys, and general merchandise. It began its journey with a beta launch in 2016, and created waves by achieving unicorn status two years later - in September 2018.

The startup is now valued at more than $3 billion.

Focusing on retail

Sujeet Kumar, who led WS Retail Pvt. Ltd. at Flipkart; Amod Malviya, ex-CTO of Flipkart; and Vaibhav Gupta, former Senior VP at Flipkart; realised that retail was the pulse of India’s economy, but was a highly inefficient segment.

Despite the size of the industry, the trio found that it was “one of the most unorganised segments in the country”. 

Outside the ambit of organised players, millions of small retailers across India were untouched by technology.

As a result, they were short-changed by intermediaries or middlemen, largely on price and, to some extent, quality. Other challenges included inefficient price discovery (producers and end consumers were either getting paid low or paying higher), lack of access to markets, unreliable logistics infrastructure, and lack of transparency.

Backed by their experience, the trio – alumni of IIT Delhi and IIT Kharagpur - decided to solve this challenge by making technology the game-changer. They quit their jobs and launched the beta version of Udaan by late 2016.

During the same time, Udaan announced its Series A fund-raise of $10 million. The company did a wider launch in June 2017.

Evolving business model

Udaan tapped into this small business ecommerce segment when no other players were spending big to leverage technology and ease the lives of small entrepreneurs. “We want to democratise the entire chain to ensure transparency and efficiency,” Sujeet says.

Over the years, the B2B startup’s business model has continued to evolve as per market requirements. The company has invested more than Rs 4,000 crore in the past 12-18 months across different pillars of business - technology, supply chain, category, credit, people, compliance etc. - to accelerate and strengthen capabilities.

“This is already showing in our growth, and we continue to aim for 100 percent YoY growth this financial year,” the email read.

As of today, Udaan has over three million users, 1.7 million retailers, and 30,000 sellers on the platform with a delivery network spanning 900 cities and 12,000 pin codes. It delivers around 1.5-1.75 lakh orders daily, and notches up to 4.5 million deliveries a month. 

 

Edited by Teja Lele Desai

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