India's Udaan hits $1b valuation with $225m Series C

The round values Udaan at $1 billion, making it the fastest Indian start-up to achieve unicorn status. The investment was first reported by The Times of India and has since been confirmed to AVCJ by Bejul Somaia, a managing director with Lightspeed India.

Lightspeed India led Udaan’s $10 million Series A round in 2016, not long after co-founders Sujeet Kumar, Amod Malviya, and Vaibhav Gupta departed Flipkart and set up on their own. The GP re-upped when DST joined a $50 million Series B in February, but the most recent contribution comes from Lightspeed’s global growth fund.

Udaan provides a marketplace through which small and medium-sized enterprises (SMEs) can overcome the language, culture and internal tax barriers that characterize the Indian economy and achieve meaningful scale. The goods and services tax (GST) regime, introduced last year, is expected to break down the country’s tariff network and make it easier for national logistics players to get a foothold, but marketplaces must still overcome a trust issue.

“These entities primarily do business within their existing circles of trust, and there are relatively limited ways for sellers to expand the buyers that they transact with, or for buyers to expand the sellers that supply them,” Somaia told AVCJ earlier this year. “Even if you discover a new trading partner, it’s hard to know whether you can trust them, and trust is the foundation of commerce.”

As such, Udaan prioritizes establishing customers’ faith in their counterparties as well as in the platform itself. It does this through data flow, collecting information on the transactions it facilitates and using it to create profiles based on a buyer’s record in terms of paying for goods on time, as well as its acceptance and rejection rates, and a seller’s ability to deliver goods to certain standards and deadlines.

The company also underwrites loans for the SMEs that use its platform and provides logistics services as part of efforts to control the customer experience from end to end. Much of the new capital is expected to go towards developing this first-mile and last-mile logistics offering.

Flipkart is now controlled by Walmart after the US retailer agreed to acquire a 77% stake for $16 billion in May.

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• Topics
• South Asia
• Expansion
• Technology
• India
• Lightspeed Venture Partners
• DST Advisors
• Growth capital
• TMT
• Logistics