E-commerce firm Udaan raises about Rs 300 crore in debt funding round

Udaan, India's largest business-to-business (B2B) e-commerce firm, has secured a new round of debt financing from leading investors, including Lighthouse Canton, Stride Ventures, InnoVen Capital, and Trifecta Capital. Collectively, these investors have contributed approximately Rs 300 crore to Udaan during the current financial year. As this is debt funding, the firm’s valuation remains unchanged.

 

This funding round follows Udaan's $340 million Series E financing, led by M&G Plc with participation from existing equity investors Lightspeed Venture Partners and DST Global. Udaan’s valuation is reported at $1.88 billion, according to data platform Tracxn.

 

The latest debt funding will strengthen Udaan’s balance sheet, offering flexibility to invest and maintain its leadership in the evolving eB2B market. With this capital, Udaan plans to expand its geographical footprint through a ‘micro-market strategy’ and optimize operations by enhancing its ‘go-to-market’ (GTM) capabilities. The funds will also be used to streamline supply chain processes, open new micro-fulfilment centres (MFCs), and improve service delivery for customers. These initiatives are expected to significantly boost operational efficiency across all verticals, enhancing productivity and reducing costs.

 

"The latest round of debt funding highlights investor confidence in Udaan’s business model and the significant potential of the Indian eB2B market. It’s an endorsement of the consistent quarter-on-quarter growth achieved over the past ten quarters through various ‘customer-first’ initiatives,” said Kiran Thadimarri, senior vice president, group finance, Udaan. “This funding will further strengthen our financial position, enabling us to double down on key strategic initiatives, such as expanding our cluster model to drive operational excellence, and to continue on our path to profitability while solidifying our market position."

 

With profitability as a priority, the funds will be strategically invested in initiatives to accelerate sustainable growth, including expanding buyer adoption and wallet share. Udaan aims to scale its product offerings, widen its geographic reach, and establish itself as the preferred partner for kirana stores and small businesses across Bharat.

 

In CY24, year-to-date (YTD), Udaan reports consistent growth, underscoring the strength of its strategic approach and the impact of its new design playbook. The company is on track for profitability, with 60 per cent revenue growth and over a 50 per cent increase in daily transacting buyers. Additionally, gross margins have improved by 200 basis points, contribution margins by 300 basis points YTD, with a 20 per cent increase in buyer wallet share and a monthly repeat ratio of over 90 per cent. During this period, Udaan also achieved a 30 per cent reduction in absolute EBITDA burn.

 

Ankit Agrawal, executive director at Lighthouse Canton, said the funding underscores confidence in Udaan's strategic direction and its role in driving sustainable growth for small businesses across India.

 

“We look forward to supporting Udaan’s journey towards empowering businesses across Bharat and achieving market leadership,” said Apoorva Sharma, managing partner, Stride Ventures.

 

Sameer Mansukhani, partner at InnoVen Capital, added that the firm remains committed to supporting Udaan’s efforts to build a profitable business.