B2B E-Commerce Startup Udaan Raises $280 Mn From New And Existing Investors

The funds will be used for market expansion and enhancing technology platform, amongst several projects

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Business-to-business (B2B) marketplace Udaan announced to have raised $280 million from new and existing investors as the Indian startup builds a corpus to speed up its expansion and fend off opponents. The new investment is not part of a new funding round but an extension of its Series D funding round.

Facebook/Udaan

The Bengaluru-based startup, which secured $585 million prior to the new capital as part of its Series D round and has overall raised $1.15 billion to date, and is now valued at more than $3.1 billion, a source told TechCrunch.

Octahedron Capital and Moonstone Capital have financed the fresh funding, with participation from existing investors Lightspeed Venture Partners, partners of DST Global, GGV Capital, Altimeter Capital, and Tencent.

The startup connects small retailers with wholesalers and traders. The company has said to have been serving more than 3 million retailers and small and medium-sized businesses and it has signed up thousands of giants, including Coca-Cola, PepsiCo, Boat Lifestyle, Micromax, HP, LG, ITC, HUL, and P&G.

“The coronavirus pandemic, which prompted New Delhi to order a nationwide lockdown and put restrictions on e-commerce firms, underscored the significance of small businesses and mom-and-pop shops (popularly known as kiranas) in the country,” said Amod Malviya, co-founder, Udaan, in a statement.

“Udaan is at the forefront of this uniquely Indian e-commerce opportunity, emerging in the last four years as one of the largest e-commerce platforms in India while taking an India-first mobile-first approach to e-commerce. This financing enables us to further our journey of taking e-commerce to the depth and breadth of the country, with Udaan’s unique low-cost model for core middle India” Malviya added.

Other than the inventory problem, the firm also helps merchants secure working capital. Small businesses, especially mom-and-pop shops, rely on the money they secure from selling their existing inventory for buying their next batch. Because Udaan is able to see the engagement of different merchants on the platform, it is able to determine to whom it could safely grant working capital, as reported by TechCrunch.

Udaan maintains that it will position the fresh funding in further creation of the market, and expanding the selection of products and categories it offers. Additionally, the four-year-old startup said it will develop its financing capabilities for small businesses and extend its supply chain network.

The fundraise “reflects the long-term truly transformative and fundamental value creation potential that Udaan platform offers for the lives and businesses of Indian MSMEs, who are major job creators and form the backbone of our economy and the society,” Malviya further added. “Participation of existing and new investors in this financing highlights the increasing recognition of capital markets of this unique nature of the Indian market and the opportunity it offers.”