The investment arm of the UK retail bank M&G has led a funding of $340 million into Udaan, a business-to-business e-commerce startup, in one of the largest financing rounds secured by an Indian startup in 2023. The Bengaluru-headquartered startup, which helps merchants in smaller Indian cities and towns secure inventories from major brands as well as gain access to working capital, said the new funds include some convertible debt. Existing backers Lightspeed Venture Partners and DST Global have also participated in the new round, which awaits regulatory nod.
Key Takeaway
Udaan, a business-to-business e-commerce startup in India, has secured $340 million in new funding led by M&G, with participation from existing backers Lightspeed Venture Partners and DST Global. The startup is focused on empowering small businesses across India and is on track to becoming profitable in the near future.
On Track to Profitability and IPO
Udaan, founded by three former Flipkart executives, has expressed its intention to become profitable in the next 12-18 months and is eyeing filing for an initial public offering in 2025. The startup, which was valued at $3.1 billion in 2021, has seen a down round in the new funding, but it remains fully funded and is making strides towards profitability.
Empowering Small Businesses Across India
Udaan works with thousands of sellers and connects them to 3 million retailers, allowing the smaller merchants to gain access to high-quality and reliable products across various categories. The startup’s reach extends beyond 1,200 cities in India for daily delivery and over 12,500 zip codes through a supply chain system. It also extends working capital to small businesses, freeing them from chasing their customers who typically settle at the end of the month or at a later date.
Support and Vision for Udaan
“M&G is pleased to support Udaan as it pursues a profitable growth strategy,” said Niranjan Sirdeshpande, (EMEA) Director at M&G Catalyst. “We believe it has the right operational platform to be the trusted partner of scale to small businesses across India by empowering them with technology, financial inclusivity, and supply chain capabilities.”
