India-based B2B ecommerce startup Udaan has raised US$250 million funding through convertible note and debt as it looks to scale its operations in the country.
According to the company, it has raised US$200 million through convertible note and US$50 million via debt. Udaan has not disclosed the name of its investors as yet, however, CEO Aditya Pande informed the employees over an internal email.
“This round was oversubscribed 2x and also saw participation from our existing investors, including those who bought into the company through the secondary round (ESOP) round in H12021”, Pande wrote in his email.
He added, “A convertible note is an instrument typically used by companies at pre-IPO stage, and the instrument converts into equity at the IPO.”
Udaan’s parent company is Singapore-based and the IPO may take place outside India. “With this convertible offering, we, as a company, have started building a complete new muscle in our finance function-which we will continue to strengthen as we go forward”, said Pande. The funding has come at a time when Udaan looks to expand its logistics network ahead of its public listing this year or early 2022. All the investors who have participated in the round have the option to flip their convertible notes into equity at a later stage.
Founded in 2016 by former Flipkart employees Sujeet Kumar, Vaibhav Gupta, and Amod Malviya, Udaan is a B2B trade platform that brings traders, manufacturers, wholesalers, retailers to a single platform.
Udaan claims to be India’s largest B2B ecommerce platform that aims to solve the core trade problems faced by small and medium-size businesses in the country.
Udaan last raised US$280 million funding in Jan 2021 from an array of investors including Octahedron Capital and Moonstone Capital Partners besides existing investors DST Global, Lightspeed Venture Partners, Altimeter Capital, GGV Capital, and Tencent Holdings. The funding then valued the company at more than US$3 billion.
Brick-and-mortar wholesale retailers such as Carry, Metro Cash, and Reliance as well as online players such as Flipkart and Amazon are Udaan’s competitors. It sells goods to other businesses including local stores. The company presently has 25,000 registered sellers and more than 3 million retailers on its platform.