India's Udaan has raised $120 million in convertible notes and debt led by existing shareholders and bondholders, as the business-to-business e-commerce startup works to being ready for the public markets in 18 months.
The new financing brings the startup's funding in convertible notes and debt to over $350 million, Udaan's CFO wrote in an email Thursday. The financing rounds are one of the largest fund raises in the country.
Pande wrote that the Bengaluru-headquartered startup, which helps merchants secure inventory and working capital, has improved its unit economics by 1,000bps. The journey of right business design has resulted in a significant reduction in burn. In the last 2 quarters, monthly buyer repeat rates have increased by over 500 basis points due to continued focus on customer-first thinking and initiatives to strengthen our value proposition for them.
An Udaan spokesman confirmed the email but wouldn't say anything.
The confidence of investors in our business model and their endorsement of the journey to unit economics, driven by great progress in evolution of our business model and cost efficiency, is reflected in the fund raise.
The steps have helped us achieve positive unit economics last quarter, as well as improved efficiency in the system, which is key to building a sustainable business, and being public market ready in a year.
Most of the business-to-business market in India is disorganized. Merchants in the nation have to travel to other cities to stock up on inventory because of this. These merchants don't have a lot of power to negotiate, so they struggle to find the best value for money.
The co-founded Udaan is a company that connects small retailers with distributors. More than 3 million retailers and small and medium-sized businesses are served by the startup and it has signed up thousands of brands.
The inventory problem is not the only one that Udaan helps merchants with. Mom-and-pop shops rely on selling their inventory for money to buy their next batches. Because Udaan is able to see the engagement of different merchants on the platform, it is able to determine who it could give working capital to.
Gupta was appointed as Udaan's chief executive last year. Udaan didn't have a CEO before. A financing round valued the startup at over $3 billion.
udaan has taken various steps to become a world-class institution that will last beyond our lifetime. Significant investments have been made to build a tech-led solid and sustainable business that offers affordable and quality products, better services, and superb experience to our business partners. Pande wrote that it wouldn't have been possible without the effort put in by each of them.
There has been an increase in the use of convertible notes and debt instruments in India this year.
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