B2B marketplace for MSMEs Udaan raises $280M from existing, new investors; valuation up from around $2.6B

Credit and Finance for MSMEs: Udaan — the business-to-business (B2B) e-commerce marketplace unicorn for small and medium businesses, and others — has raised $280 million in additional financing from its existing investors apart from few new investors. The distribution portal, which enables retailers and businesses to source merchandise from manufacturers, brands, white labels, importers, etc. on a single platform, has raised the latest round from existing investors including Lightspeed Venture Partners, DST Global, GGV Capital, Altimeter Capital, and Tencent. Octahedron Capital and Moonstone Capital were the new investors added to the cap table. The latest funding is part of the Series D round wherein the company had raised $585 million in 2019. The total investment in the company so far stood at $1.15 Billion while the latest round valued the company at around $3 billion, a source told Financial Express Online, marginally up from approximately $2.6 billion during the last round.

Udaan declined to comment on the latest valuation.

The company said it will deploy the capital towards “continued market creation of B2B e-commerce in India, reaching out to more and more small businesses.” The company would invest in “continued expansion of selection of products and categories available on Udaan, furthering user experience, enhancing technology platform, expanding our SME financing capabilities and reinforcement of the supply-chain infrastructure.”

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“Covid-19 has accelerated the already fast digital-led evolution of highly fragmented and unorganized Indian trade/ retail industry. While at the same time, the pandemic also highlighted the unique structure of the Indian economy, with millions of kiranas and neighbourhood stores becoming the lifeline of our country at the time of crisis,” Amod Malviya, Co-founder, Udaan said in a statement. The company claimed a network of over 3 million users in 900 cities and connecting them to more than 25,000 sellers in India.

Udaan’s SaaS offerings included analysis of real-time marketing feedback through app data analytics to enable brands and manufacturers to make informed decisions about product launches and testing of new products in different markets. According to a RedSeer analysis, the Indian retail B2B market is likely to grow at a 10 per cent CAGR from $714 billion in FY19 to reach $1.3 trillion by FY25 while the online B2B segment could be more than $60 billion by 2025. The margin in the eB2B segment is expected to go up from the current 0-4 per cent with an almost two-fold potential-jump on the back of direct procurement from brands, providing value-added services such as technology solutions, credit, etc.