With $280-mn war chest, Udaan to battle Flipkart, Amazon in ‘Bharat’
After raising mega funding from Lightspeed, Yuri Milner’s DST Global and Tencent, Udaan is gearing up to take on Amazon and Flipkart by making deeper inroads into ‘Bharat’ (tier-2 and tier-3 cities, as well as rural India).
The Bengaluru-based business-to-business (B2B) e-commerce start-up is strengthening its tech-enabled and cost-effective supply chain and logistics platform. It hopes to tap small businesses, including kiranas.
It is expanding the selection of products and categories, as well as improving user experience.
“We are committed to offering world-class, techenabled and cost-effective supply chain and logistics solutions, in addition to the benefits of e-commerce scale, to small businesses of Bharat,” said Sujeet Kumar, co-founder of Udaan.
CY20 posed the biggest leadership tests for Kumar and co-founders Amod Malviya and Vaibhav Gupta, who founded Udaan in 2016.
After raising $585 million from marquee investors in October 2019 and gaining recognition as India’s fastestgrowing Unicorn, Udaan’s business model was severely disrupted by the pandemic. At one stage during the lockdown, Udaan is said to have lost 60 per cent of its business.
However, the founders and their team manaegd to pull Udaan out of the carnage. The pandemic has accelerated the digital-led evolution of a highly fragmented and unorganised Indian retail industry.
The firm raised $280 million in additional financing from existing and new investors in January, at a valuation of over $3.1 billion. The proceeds have helped Udaan strengthen its supply chain and logistics capability and serve small businesses through Udaanexpress.
This includes increasing warehousing capacity, which is now equivalent in size to 175 football fields or around 230 acres of open space. This milestone has been made possible through capacity expansion and addition of new warehouses, taking the total number of warehouses to 200.
The booming online retail sales last year showed that smaller cities and rural areas of the country are now a key market not only for Udaan, but Amazon and Flipkart too.
Despite having a firstmover advantage, Udaan is facing serious competition in the B2B e-commerce space.
Flipkart Wholesale, the digital B2B marketplace launched by the Walmartowned e-commerce giant a few months ago, is betting big on the grocery business.
Flipkart Wholesale has plans to scale up its business; it aims to provide kiranas and small retailers one-stop access to a wide selection of products.
Udaan witnessed rapid growth in revenue in FY20, at ~978 crore ($134 million). This was over 21x its FY19 figure.