Udaan's Market Worth Slashes by Half to $1.8B Amidst Down Round

Udaan, a prominent player in the B2B (Business-to-Business) ecommerce sector, has experienced a significant devaluation, with its worth plummeting by nearly 50% to approximately $1.8 billion in a recent down round as per ET’s report. This valuation is a sharp decline from the Bengaluru-based startup's previous valuation of $3.2 billion during its latest funding round in January 2021. A down round is identified as a funding round where a company raises capital at a valuation that is lower than the valuation of its previous funding round.

In December of the previous year, Udaan successfully raised $340 million in a Series E funding round. This round was led by the UK-based savings and investment firm M&G Prudential and saw contributions from existing investors including Lightspeed Venture Partners and DST Global. The round was a mix of fresh equity investments and the conversion of existing debt (in the form of convertible notes) into equity.

Udaan was established by Vaibhav Gupta, Sujeet Kumar, and Amod Malviya. The company primarily operates by facilitating B2B trade, emphasizing efficient supply chain and logistics operations. Udaan claims to handle daily deliveries across more than 1,000 cities and over 12,500 pin codes via its service, udaanExpress. The company has garnered support from notable backers such as Lightspeed, Microsoft, and Tencent.

However, shortly after securing the $340 million in its Series E funding round, Udaan made a decision to lay off nearly 120 employees within a week. According to the company, these layoffs were part of an ongoing effort to build a more profitable business model, with a focus on being customer-centric and agile. Some redundancies were identified as part of this process.

Udaan's CEO, Vaibhav Gupta, has been vocal about the company's dedication to reducing costs on a quarterly basis. The company is actively working towards this goal and has set explicit operational targets. It has communicated to investors its aim to reach operational profitability within the next two quarters.

Despite these efforts, it's noteworthy that Udaan is not the only unicorn facing valuation challenges. In a similar vein, BlackRock, a US-based asset manager, significantly slashed the valuation of the edtech giant BYJU’S by about 95%, bringing it down from $22 billion to just $1 billion.

The developments at Udaan signify a turbulent period in the tech and startup ecosystem, reflecting broader trends and challenges within the industry​​.