Udaan’s revenue jumps 21X in FY20; losses surge to Rs 2,519 Cr


Udaan has emerged as the poster boy of the B2B e-commerce space and investors remain bullish on its long term potential as they poured in $280 million in an extended Series D round at a valuation of $3 billion last month.

While the pandemic had disrupted Udaan’s operations for the major part of the ongoing fiscal, the company recently claimed to have bounced back by surpassing its pre-covid peak.

The actual impact of the pandemic can only be ascertained when the company files its financial results for the ongoing fiscal but regulatory filings in Singapore showed that its revenue had registered a 21-fold growth in FY20. 

Before we delve deep into its financial numbers, let’s understand the structure of Udaan in India. The company operates with 11 subsidiaries providing a B2B marketplace platform for retailers to procure goods and also provides them ancillary services including lending, logistics and payment services among others.

The five-year-old company managed to scale its revenues over 21X during FY20 as revenues grew to Rs 978 crore from Rs 46.3 crore in FY19. But the company’s spending has continued to grow as it develops its customer base of retailers. 

Udaan’s annual expenditure has shot up 4.X to around Rs 3,488 crore in FY20 from the expenses of Rs 850 crore in FY19. 

It’s worth noting that the holding entity Trustroot Internet operates from Singapore and Fintrackr is reporting these annual numbers from the certified corporate compliance and financial profile filed by the company which is an abridged financial profile certified by its auditors. 

Entrackr has reached out to Udaan for a comment but the company did not respond till the time of publishing this story. 

While the Tencent-backed startup has managed to improve its operating margin from -1679.27% in FY19 to -251.18% in FY20, the quantum of losses have grown. 


Annual losses have ballooned 3.23X to Rs 2,518.7 crore in FY20 from Rs 779.6 crore in FY19. Outstanding losses have mounted to Rs 3,009.5 crore.

To understand the spending pattern of the company we went through the numbers of its largest subsidiary in India – Hiveloop Technology Pvt Ltd.  This subsidiary accounts for 23% of the company’s revenue and expenses, making up 34% of the total expenses incurred by the Udaan group. It earned operating revenue of Rs 225.63 while its annual spend shot up 2.52X to Rs 1,181.4 crore during FY20. 

Looking over the expense sheet of this subsidiary, we see that the cost of external contracts is the biggest cost centre, making up 30% of the annual costs. These expenses have ballooned 4.08X to Rs 348.2 crore in FY20. Hiveloop spent another Rs 338 crore for employee benefits which grew 97.2% in FY20.

Costs related to advertising went up 8.3X to Rs 69.3 crore while legal and professional fees have grown 4.8X to Rs 97.7 crore in FY20. This subsidiary lost Rs 923.45 crore in FY20 which grew 175% YoY. 

Udaan was severely impacted by the pandemic between April and November 2020. Its operations were disrupted as supply chain and retailers were forced to shut business because of the lockdown and a lull in business. The company had also laid off several thousand contractual staff during peak Covid days. 

Despite the challenges brought on by the pandemic, Udaan claims to have enabled over 250 sellers under the lifestyle category achieve sales worth Rs 1 crore on its platform in 2020. Currently, Udaan has over 3 million users, 1.7 million retailers and 30,000 sellers across the country. 

While the financial performance of Udaan in FY20 is far from being healthy, its hyper-growth in operating revenue is a healthy sign. The Bengaluru-based firm requires to improve its unit economics in the upcoming fiscals while competing with its deep-pocketed rivals Flipkart and Amazon. 

Since last year, the two B2C e-commerce majors have turned aggressive on ramping up their B2B business.

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