Indian business-to-business (B2B) marketplace Udaan has raised $340 million in a Series E funding round led by M&G Plc.
The round was a mix of equity and convertible notes, the company said on Thursday, adding that it aims to make its public market debut over the next 12-18 months.
The financing round was also participated by existing equity investors Lightspeed Venture Partners and DST Global.
The fresh capital will be used to strengthen Udaan’s customer experience, market penetration, strategic vendor partnerships and also to reinforce long-term capabilities of supply-chain and credit,
Udaan, established in 2016 by former Flipkart employees Amod Malviya, Sujeet Kumar, and Vaibhav Gupta, enables traders, wholesalers, retailers, and manufacturers to come together on a platform to find clients, suppliers, and products across 1,200+ cities and 12,500+ pin codes through udaanExpress.
It also counts Microsoft, Nomura, Samena Capital, DST Global, GGV Capital, Altimeter Capital and Tencent among its investors.
With this exercise, Udaan’s business is fully funded and on course to achieve its objective of becoming profitable in the next 12-18 months, the firm said.
“Series E round strengthens our balance sheet and fully funds our business plan. It enables our continued journey of growth and profitability, positioning us well to be public-market ready in the next 12-18 months,” said Gupta.
Udaan also needed some funds to repay a loan that was coming due in early 2024 and required the startup to have just as much capital raised against equity in the bank for the entire tenure of the lending, according to TechCrunch.
In Oct, Udaan reported 33% lower losses for the year ended March 2023, even as the firm’s revenue fell 43%. The company reported $675 million in revenues from contracts with customers in FY23, compared with $1.19 billion in FY22. Its losses, net of tax, in the same period, narrowed to $250 million.
A drop in costs including staff costs and other expenses such as logistics charges, outsourced manpower, marketing expenses etc. was responsible for the lower losses.
Last November, the company laid off 350 employees in its second round of layoffs. In June 2022, it had handed pink slips to 180 workers.
In November, the company had also raised around $35-40 million in debt from growth-stage debt financing platform EvolutionX Debt Capital, a source familiar with the matter told DealStreetAsia, a month after it secured $120 million in convertible notes and debt.
The lead investor in the latest round M&G Investments is part of M&G plc, a savings and investment business that was formed in 2017 through the merger of Prudential plc’s UK and Europe savings and insurance operation and M&G, its wholly-owned international investment manager.