Udaan set to raise ₹4k cr, valuation to touch $4.5-5 bn

MUMBAI: B2B marketplace Udaan is set to raise as much as ₹4,000 crore to fund expansion as more retailers and wholesalers embrace digital commerce, two people directly aware of the plan said. Udaan is likely to close funding round in next few weeks, the people cited above said, requesting anonymity.

The fundraising will value the startup at $4.5-5 billion, one of the two people said. “There is an unprecedented demand to add capacity as customers are migrating to e-commerce platforms,” the person said. This will be the largest fundraising by the five-year-old Udaan, which has hired Goldman Sachs to manage the process, the person said.

Udaan currently has more than 3 million retailers and 25,000 sellers on its platform, and plans to “double sales volume within a year” by tying up with more sellers, expanding its logistics network and employing technology to grow its business in the pharmaceutical and packaged consumer goods space that has seen a surge in demand in the past year.

Experts said digitization of the retail and wholesale supply chains is likely to outlast the crisis and trigger faster expansion of both customer and business-centric e-commerce platforms. Udaan connects manufacturers with small retailers across food, electronics and fashion and pharmaceuticals sectors.

Online B2B platforms have seen rapid growth in recent years but still form a minuscule part of the overall market. Many retailers and brands started using the platforms during the pandemic as orders could be placed regardless of lockdowns, and they offered assured delivery of goods. Udaan’s food category business soared last year, with transaction volumes crossing 8,000 tonnes per day. Its foods business, which has been contributing 55-60% of total sales, com“the prises fast-moving consumer goods (FMCG), staples and fresh products.

“Udaan will invest in expanding products and categories on its platform and bring in even better technology to help small and medium enterprises develop financing capabilities and improve supply-chain infrastructure further,” said the second person.