Udaan Secures Rs 300 Crore in Debt Financing to Bolster Profitability and Expansion

Bengaluru-based eB2B platform Udaan has successfully closed a Rs 300 crore debt financing round with support from Lighthouse Canton, Stride Ventures, InnoVen Capital, and Trifecta Capital. The company plans to utilize the new funds to expand its geographical reach and drive growth through its ‘Micro-Market strategy,’ which aims to deepen buyer engagement and increase wallet share as Udaan focuses on profitability. Additionally, the financing will support Udaan’s Go-to-Market (GTM) strategies, optimize its supply chain, and fuel investment in new Micro-fulfilment Centres (MFCs) to enhance service delivery.

Kiran Thadimarri, Senior Vice President of Group Finance at Udaan, commented on the funding round, stating, “This funding will further strengthen our financial position, providing the flexibility to double down on key strategic initiatives such as expanding our Cluster model to drive operational excellence enabling us to continue on our path to profitability while solidifying our market position.”

Over the calendar year 2024, Udaan has seen robust growth, with a 60% increase in revenue and a 50% rise in daily transacting buyers year-to-date. Its financial metrics have also shown marked improvement, with gross margins increasing by 200 basis points (bps) and contribution margins by 300 bps. Furthermore, Udaan has managed to reduce its EBITDA burn by 30% and has seen a 20% increase in buyer wallet share.

Udaan’s platform, launched in 2016, has rapidly grown to secure an estimated 70% share in India’s eB2B market across key sectors, including FMCG, staples, fruits and vegetables, and pharmaceuticals. This latest debt financing comes as the company continues to prioritize profitability, supported by its earlier $340 million Series E round led by London-based investment manager M&G Plc, with additional contributions from Lightspeed and DST Global.

In the final quarter of 2023, Udaan implemented workforce adjustments, reducing its team by 100-120 employees to enhance operational efficiency. The company aims to utilize this funding to further develop its strategic initiatives, strengthen its supply chain, and bolster its market presence across India.