IPO-bound Udaan raises $75 million from M&G, Lightspeed, and others

Udaan co-founder and chief executive officer Vaibhav Gupta said that the company was in advanced talks to close an additional equity round of $25 million from potential investors in the coming quarter

Business-to-business (B2B) e-commerce firm Udaan on Monday has raised $75 million equity funding in Series G round as the firm geared up for an initial public offering (IPO), according to the people familiar with the matter.

 

Udaan co-founder and chief executive officer (CEO) Vaibhav Gupta in town hall meeting told the employees that the company was in advanced talks to close an additional equity round of $25 million from potential investors in the coming quarter.

 

Udaan plans to use the funds to further enhance customer experience, deepen market penetration, strengthen strategic vendor partnerships, and bolster long-term capabilities in supply chain and credit.

 

 

Udaan competes with players such as Amazon, Flipkart, and Reliance’s JioMart in the B2B e-commerce space. This segment is expected to surpass sales of $125 billion by 2027, expanding at a compound annual growth rate of 45 per cent, according to a report by Avendus Capital.

 

This latest funding round, led by M&G Plc with strong participation from existing investors including Lightspeed Venture Partners, follows Udaan’s last funding round, in which the company had raised $340 million in December 2023.

 

The company’s valuation remains the same at about $1.8 billion.

 

Udaan has raised a total funding of $1.88 billion from investors such as M&G Plc, Lightspeed Venture Partners, and DST Global.

 

The funding comes at a time when Udaan recently got a go ahead from the National Company Law Tribunal (NCLT) for its internal corporate restructuring plan. By consolidating into a single entity, the restructuring will enhance Udaan’s agility and pave the way for various financing options, including the ability to pursue an initial public offering (IPO) in India by 2026, according to people familiar with the matter.

 

“The company is preparing for an IPO by the end of 2025 or early next year,” said a person.

 

The approved restructuring consolidates Udaan’s businesses across various entities into Hiveloop Ecommerce Pvt Ltd, setting the stage for operationalising a flagship entity. The scheme strengthens Udaan’s operating model by unifying its business into an integrated structure. This would significantly simplify operations and create efficiencies.

 

The firm’s revenue reached ~5,700 crore in the financial year 2023-24 (FY23-24). It reduced Ebitda (earnings before interest, taxes, depreciation, and amortisation) burn by 36 per cent year-on-year to ~923 crore.

 

There was also a 35 per cent decline in SG&A (selling, general, and administrative) expenses, reflecting the resilience of the company’s business model and the operational efficiencies driven by disciplined execution.

 

According to the company sources, the firm is on track to achieving profitability, with a 65 per cent revenue growth and over 70 per cent increase in daily transacting buyers, driving deeper market penetration and increasing wallet share among retailers.

 

Additionally, gross margins have improved by 200 basis points and contribution margins by 300 basis points, alongside a 20 per cent increase in buyer wallet share and monthly repeat ratio of over 90 per cent.