B2B e-commerce unicorn Udaan, which is expected to file for an IPO soon, said it recorded a 65% year-on-year (y-o-y) rise in its annual recurring revenue (ARR) in the calendar year 2024. For comparison, in FY24, the company reported flat revenue growth at Rs 5,706 crore, while narrowing losses by 19% to Rs 1,674 crore, and in FY23, its revenue from operations had declined by 43%.
The growth in ARR last year was driven by a 70% rise in the number of daily buyers on Udaan’s platform, with the repeat rate of purchase doubling y-o-y to an all-time high, the company said. Overall, the company shipped over 2.45 billion units in the FMCG business.
To drive growth while balancing profitability, Udaan implemented a ‘micro-market’ strategy early last year, which helped the company increase customer penetration while cutting down supply chain costs. This strategy creates a small, geographically-confined area, typically including a single or a group of pin codes. In each such micro-market, the usual residential population is about 40,000-50,000, with an average size of around 3 km, and an estimated buyer density of 120-140 per km.
Moreover, in 2024, the company reduced its absolute Ebitda burn by 30% and improved its gross margins by 200 basis points (bps) and contribution margins by 320 bps. The company also said it recorded a 20% increase in buyer wallet share.
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“With 85%+ growth in FMCG and 250% growth in staples private labels business, we are not just enabling kirana commerce but actively leading its transformation,” Vaibhav Gupta, its co-founder and CEO, said. The growth in Udaan’s FMCG business was driven by a 50% increase in order volume and a 60% increase in the number of buyers.
On the platform, Bengaluru, Delhi, Hyderabad, and Kolkata continuing to drive growth among metros, while non-metro cities such as Ghaziabad, Jaipur, Ahmedabad, Lucknow, and Indore saw rapid adoption. Pune, Mysore, and Mumbai have also emerged as high-growth markets.
Last week, Udaan raised $75 million in a series G round led by UK-based M&G and existing investors such as Lightspeed, and is in advanced talks to secure another $25 million. This round comes after the company raised nearly Rs 300 crore in debt from investors such as Lighthouse Canton,
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