India B2B marketplace Udaan raises $280m
Udaan, an India-based B2B marketplace, has raised $280 million from an investor group that includes existing backers Lightspeed Venture Partners, Tencent Holdings, DST Global, GGV Capital, and Altimeter Capital.
Octahedron Capital and Moonstone Capital are among the new investors. It follows a $585 million Series D round in 2019 and brings total funding to date to around $1.1 billion.
Udaan was founded by Vaibhav Gupta, Amod Malviya and Sujeet Kumar, all former executives of Indian e-commerce giant Flipkart, with a view to providing an online marketplace to small and medium-sized enterprise (SME) clients in a range of consumer-facing sectors. The company claims to be the largest platform of its kind in India with more than three million users in 900 cities and a network of 25,000 sellers.
The idea is to improve users’ supply chain options in terms of price and quality by creating access to a wider selection of products in a one-stop service that brings together payments, underwriting small business loans, and facilitating end-to-end delivery. Udaan provides analysis of real-time marketing feedback so that businesses can make more informed decisions about product launches. There is also an app-based pricing system and an in-app advertising service.
“COVID-19 has accelerated the already fast digital-led evolution of highly fragmented and unorganized Indian trade and retail industry,” Malviya said in a statement. "At the same time, the pandemic also highlighted the unique structure of the Indian economy, with millions of kiranas and neighborhood stores becoming the lifeline of our country at the time of crisis.
“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.”
The fresh capital will be used to expand the selection of products and categories available on Udaan, which currently encompasses lifestyle, electronics, home and kitchen, staples, fruits and vegetables, fast-moving consumer goods, pharmaceuticals, and toys. It will also be applied to improving user experience through technology enhancements, expansion of SME financing capabilities, and the reinforcement of supply chain infrastructure.
Udaan achieved unicorn status only two years after inception in 2018, making it one of the fastest Indian start-ups to achieve the milestone. The company is now estimated to be worth around $3 billion. Previous investors also include Hillhouse Capital, Citi Ventures, Footpath Ventures, and Yuri Milner, founder of DST.
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