B2B e-commerce startup Udaan on Monday said it has raised nearly Rs 300 crore in a debt financing round from investors such as Lighthouse Canton, Stride Ventures, InnoVen Capital and Trifecta Capital. This round follows Udaan’s $340-million Series E funding round in December last year, which was led by UK-based M&G.
Besides strengthening its balance sheet, the company plans to use the funds to scale its geographical footprint through its ‘micro-market strategy’, which creates a small, geographically-confined area, typically including a single or a group of PIN codes.
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Piloted in Bengaluru earlier this year, 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. Retail outlets constitute three-fourths of these micro-markets, while the rest are HoReCa establishments – hotels, restaurants and cafes.
Moreover, Uddan said it will utilise the funds to enhance its go-to-market capabilities, streamline supply chain processes, invest in opening new micro-fulfilment centres and elevate service delivery experience for customers.
The Bengaluru-based firm, which began operations in 2016, was co-founded by former Flipkart executives Sujeet Kumar, Amod Malviya and Vaibhav Gupta, and is backed by Microsoft and Tencent, among other investors.
Till date in 2024, Udaan has recorded a 60% revenue growth and over a 50% increase in daily transacting buyers, the company said in a statement, adding that it is on its path to profitability and has achieved a 30% reduction in absolute Ebitda burn. Udaan had earlier mentioned plans to be public market ready by mid-2025.
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The company added that its gross margins have improved by 200 basis points and contribution margins by 300 basis points year-to-date, alongside a 20% increase in buyer wallet share and monthly repeat ratio of over 90%.
While the company is yet to disclose its FY24 financials, in FY23 its revenue from operations declined by 43% year-on-year to Rs 5,609.3 crore, while losses also shrank by about 34% to Rs 2,076 crore from Rs 3,132 crore a year ago.
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