udaan raises $120M in convertible notes and debt

An internal mail confirmed udaan has recently concluded a fund raise led by existing shareholders and bondholders. It aims to be public market ready in 12-18 months.

udaan raises $120M in convertible notes and debt

Thursday October 27, 2022,

2 min Read

B2B ecommerce unicorn Udaan recently concluded a fund raise of $120 million in convertible notes and debt, led by existing shareholders and bondholders.

A convertible note is an instrument typically used by companies at the pre-IPO stage to be converted into equity at the initial public offering. 

In an internal email reviewed by YourStory, CFO Aditya Pande wrote that udaan has raised more than $350 million in funding through convertible notes and debt in the last four quarters.

"This fund raise reflects the confidence of investors in our business model and their endorsement of the journey to unit economics, driven by great progress in evolution of our business model and cost efficiency, that we initiated last year," said the email.

udaan aims to be public market-ready in the next 12-18 months.

Aditya added that the team has taken several steps to not only "achieve positive unit economics last quarter" but also improve efficiency, "with huge cost benefits".

Outlining key achievements, the email stated that the company's unit economics has improved by ~1,000 bps with equally strong improvements in both gross margins and operating costs. It added that "the right business design and unit economics has translated into a 60%+ reduction in burn".

"Continued focus on customer-first thinking & initiatives on strengthening our value proposition for them have resulted in monthly buyer repeat rates increasing by 500+bps in the last two quarters," said the email.

"With your support, we will continue to invest to build udaan as a professionally run organisation with scale, capabilities and resilience that can leverage the huge opportunity that Kirana commerce offers, while empowering the small businesses of Bharat," concluded the email.

Founded in 2016, udaan enables supply chain and logistics operations focused on B2B trade. It has a network of over three million retailers, chemists, kirana shops, HoReCa, farmers, and 25-30,000 sellers across 1,200+ cities in the country covering more than 12,000 pin codes.

Its last fund raise was in December 2021 when it closed $250 million in convertible note and debt.

Edited by Saheli Sen Gupta