Raising $120 Million, Udaan Likely to Delay Its IPO

Business-to-Business (B2B) platform Udaan has generated $120 million through debt funding from its existing shareholders. The company’s chief financing officer Aditya Pande informed employees about this through an internal mail.

“With this round, the total funds raised by Udaan through convertible notes and debt in the last four quarters has crossed $350 million, making it one of the largest structured instrument fund raises in the country,” Pande told the workers. 

Multiple sources claim that the start-up hopes to raise another $ 30 million to $50 million in another tranche. 

As it continues to raise funds from various sources, the B2B ecommerce unicorn's proposed Initial Public Offering (IPO) is likely to be delayed by 12 to 18 months. 

In February, Vaibhav Gupta, Udaan’s chief executive officer (CEO) told the Economic Times that the company sought to go public by May 2023. This announcement came close on the heels of it raising a $250 million funding through the issuance of $200 million convertible notes in January 2022. 

As a B2B platform, Udaan enables small manufacturers, farmers, and brands to market their products on its platforms to gain a larger reach. Udaan witnessed a 40 per cent reduction in cash burn in the first half of 2022, which it claimed has further reduced to 60 per cent as the company observes significant improvement in its operational cost and unit economics. The unit economics has been improved by 10 per cent and also the gross margin is in good shape, Aditya Pande claimed. 

“Continued focus on customer-first thinking and initiatives on strengthening our value proposition for them have resulted in monthly buyer repeat rates increasing by 5% in the last 2 quarters,” he added in an internal note to employees.