Indian unicorn Udaan bags $340m in series E money

Photo credit: Udaan

Udaan, an Indian B2B commerce firm, has raised US$340 million in a series E round led by England-based investment firm M&G. Existing equity investors Lightspeed Venture Partners and DST Global also participated.

The funding includes a fresh equity investment as well as the conversion of existing debt into equity. It helps to strengthen Udaan’s balance sheet as the company aims for profitability in the next 12 to 18 months.

The company did not disclose its valuation in this round. Udaan was reportedly valued between US$2.3 billion to US$2.7 billion in its series D round from October 2019, when it raised US$585 million.

Udaan makes money by helping merchants market and sell their products across India. It lets buyers – which include small businesses such as shopkeepers, restaurants, and street vendors – source from a large selection of products at lower prices.

The company plans to use the funds to improve customer experience, market penetration, strategic vendor partnerships, and strengthen capabilities in supply chain and credit.

“Over the last 12 months, Udaan has seen strong and steady validation of its multicategory, cluster-anchored business strategy,” the company said in a statement.

The firm reported a 43% revenue drop to US$676 million in the financial year ended March 2023. It also scaled down its operations in some regions across the country, as the company is looking to spend less in non-core markets.

See also: Udaan cuts losses by 33%, but revenue takes hit as it shrinks operations

In November 2022, Udaan let go of over 1,000 employees – 300 to 350 staff and more than 700 contract workers – as part of its second round of layoffs.

Similar headwinds seem to apply to B2B ecommerce players in Indonesia as well. GudangAda saw revenue soar 10x in 2022 but remains unprofitable.

Ula, which primarily targets mom and pop shops called warungs, announced that it is laying off employees in October. Following that, the company announced that it is transitioning out of its inventory-led FMCG distribution business.