B2B e-commerce unicorn Udaan has raised $120 million in convertible notes and debt from existing shareholders and bondholders, among others.
With this round, the total funds raised by Udaan through convertible notes and debt in the last four quarters have crossed $350 million. The company is also aiming to become IPO-ready in 12-18 months, according to an internal email sent by company’s Chief Financial Officer (CFO) Aditya Pande, which BusinessLine has reviewed.
In this email, Pande said, “Despite the funding-related challenges being experienced by the larger start-up ecosystem, this fundraise reflects the confidence of investors in our business model and their endorsement of the journey to unit economics, driven by great progress in evolution of our business model and cost efficiency, that we initiated last year.”
He added that these steps have helped the company in achieving positive unit economics last quarter, and also improved efficiency in the system, “with huge cost benefits, which is key to building a sustainable business and being public market ready in 12-18 months.”
Repeat buys improve
The company is said to have improved its unit economics by ~ 1,000bps (basis points) and Udaan’s cash burn has reduced by over 60 per cent. Further, the company’s monthly buyer repeat rates have also improved by 500+bps (basis points) in the last 2 quarters.
“The success of our various initiatives and endorsements from investors further strengthens our commitment to continue making focused interventions that are critical to our plans of achieving profitability,” Pande added.
According to a September 2022 report by Redseer, Udaan holds about 46 per cent of the market share in B2B ecommerce, followed by Jiomart. The report added that India’s B2B e-commerce market is expected to reach $90-100 billion in gross merchandise value (GMV) by 2030 as compared to $5 billion market in 2021.