B2B marketplace Udaan raises $340M in Series E round led by UK’s M&G Plc

Business-to-business (B2B) ecommerce player Udaan has secured $340 million in a Series E financing round led by London-based global investment manager M&G Plc. Existing investors Lightspeed and DST Global also participated in the round.

The funding is a combination of fresh equity investment and conversion of existing convertible notes into equity, the firm said in a statement.

Udaan aims to use the funding to strengthen customer experience and market penetration, forge strategic vendor partnerships, and reinforce supply-chain and credit capabilities, it said in a statement.

Udaan has raised upwards of $350 million in debt funding over the last two years, with the latest investment coming from Temasek-backed EvolutionX Debt Capital. In October last year, the Bengaluru-based firm bagged $120 million in convertible notes from existing shareholders and bondholders.

The Series E round is expected to enable Udaan to hit operational profitability in the next 12-18 months. Udaan has spent the last eight quarters working towards finetuning its business strategy to achieve the profitability milestone, the company said.

The company also expects to be ready for a public market listing over the next few months, it noted.

“The 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,” said Vaibhav Gupta, Co-founder and CEO of Udaan.

The funding comes just months after the company restructured its business units following the exit of Chief Technology Officer Gaurav Bhalotia. 

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Founded in 2016 by former Flipkart executives Sujeet Kumar, Amod Malviya, and Vaibhav Gupta, Udaan is a B2B ecommerce platform with over 3 million retailers listed across categories such as fruits and vegetables, electronics, home and kitchen supplies, and lifestyle. Udaan supplies groceries and other products to sellers who further sell to customers.

The company has raised over $1.5 billion (debt and equity) so far from investors including Lightspeed, Tencent Holdings, and DST Global.

Udaan implemented a regionally operated cluster-led approach over the last 12 months, aimed at improving operational efficiency, according to the company.

In FY23, Udaan’s losses narrowed 33% year-over-year to Rs 2,213 crore while operating revenue plunged 43% to Rs 5,609 crore compared to the previous year.

“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 billion eB2B market opportunity,” said Gupta.

Niranjan Sirdeshpande, Director (EMEA), M&G Catalyst, said, “We believe it (Udaan) has the right operational platform to be the trusted partner of scale to small businesses across India by empowering them with technology, financial inclusivity, and supply chain capabilities. Our investment strategy aligns with Udaan’s ambition to simplify and increase efficiency in a congested B2B market.”