B2B e-commerce startup Udaan has raised $120 million in convertible notes and debt, led by existing shareholders and bondholders. With this round, the company’s total funds from convertible notes and debt in the last four quarters have surpassed $350 million.
Udaan raised $250 million earlier this year, including $50 million in debt and $200 million in a convertible note. Udaan raised $500 million in 2021, bringing its total funding to $1.4 billion. In 12 to 18 months, the startup, funded by Tencent and Lightspeed Ventures, plans to list on the stock market.
Udaan intends to increase its nationwide warehouse capacity to 50 million square feet in the following seven to eight years to meet the rising demand.
Aditya Pande, CFO of Udaan, said, “Despite the funding-related challenges being experienced by the larger startup ecosystem, this fundraiser reflects the confidence of investors in our business model and their endorsement of the journey to unit economics.”
Right business design and unit economics is Udaan’s success mantra
Despite the funding-related challenges that the larger startup ecosystem faces, this fundraiser reflects investors’ confidence in our business model and their support for the journey to unit economics that we began last year, driven by significant progress in the evolution of our business model and cost efficiency, said Pande.
Its unit economics improved by 1000bps, while gross margins and operating costs improved significantly. The CFO informed employees that monthly buyer repeat rates had increased by 500bps or more in the previous two quarters.
Udaan, founded in 2016, operates in various industries, including general merchandise, FMCG, pharma, toys, home & kitchen, basics, fruits & vegetables, and electronics. The B2B startup has achieved considerable progress over the past few years thanks to the significant investments Udaan has made in creating a tech-driven, stable, and sustainable corporation.
The Bengaluru-based startup serves more than 12,000 pin codes with over 30 lakh stores and 25,000 sellers across 900 cities. With over 1.7 million businesses, pharmacies, Kirana shops, and farmers using the network, over 4.5 million transactions are made monthly.