Unicorn B2B e-commerce startup Udaan has raised $585 million on October 4th recently, in Series D funding from investors such as Tencent, Altimeter, Footpath Ventures, Hillhouse, GGV Capital and Citi Ventures.
Current investors Lightspeed Venture Partners, (which first started funding the startup in 2016) and DST Global also invested in the round. Udaan has now raised half a billion plus dollars in a new financing round.
The company aims to bring more and more kirana stores, chemists and other small businesses online through its platform.
The new round for the startup is probably the largest for any B2B e-commerce platform in India, and has pushed valuation for Udaan from $2.3 billion to $2.7 billion.
Udaan will be investing the newly gained capital towards the expansion of its supply chain network and to focus on growing the marketplace in existing and new categories. The startup will also look to scale up UdaanCapital, its credit line business.
Udaan, which in recent quarters,has introduced features such as support for government-backed UPI payments platform and an easy tax invoicing tool, expects to bring in about $2 billion in annual GMV this year.
The fastest startup to join the ‘unicorn’ club, Udaan manages a huge B2B marketplace which connects small retailers with wholesalers and traders. The startup has set up a supply chain network throughout the nation to fulfill more than half of the orders on its platform.The platform supports a wide-range of categories from lifestyle, electronics, home and kitchen, staples and toys, to fruits and vegetables.The company is solving one of the biggest problems faced by small and micro businesses and merchants in India where Udaan and other non-banking partners have joined hands to provide working capital to small businesses.
The startup has targeted more than 3 million retailers and 25,000 sellers from 900 cities and towns in India. The startup processed 5 million orders in the month of August itself. A wide range of merchants, including farmers, shopkeeper owners, restaurants, chemists and street vendors are connected to Udaan.
Amazon and Walmart have invested billions of dollars to create business-to-commerce marketplaces in India, but e-commerce still accounts for just 3% of the overall retail market in the country. Their major rivals are local kirana stores that are spread over thousands of villages, cities, towns and slums of India.
The market opportunity is turning out to be much deeper than we envisioned when Lightspeed led the company’s Series A financing in 2016 and we’re excited to continue supporting the company while welcoming a strong syndicate of new investors,”
said Bejul Somaia, a partner at Lightspeed Venture Partners. Further,
Udaan represents a powerful example of how technology can empower the business of small merchants, improve the efficiency of industries and bring benefits to consumers,” said Martin Lau, president of Tencent.
Recently, many Silicon Valley companies have also started to address these businesses. Google has launched tools to help these local stores set up their online presence, and, last month, it launched a business app of Google Pay to help these merchants accept online payments.