Udaan raises $250 Mn via convertible note and debt

B2B e-commerce platform Udaan has raised another round of $250 million via convertible note and debt, according to an internal email shared by the company’s top executive that Entrackr has seen. This is the second funding round for the Bengaluru-based company in the past 12 months. It had raised $280 million in its extended Series D round from new and existing investors in January last year.

“We are excited and glad to share that we have 5 new marquee investors coming onboard the Udaan juggernaut, as part of our recently concluded convertible note financing. This round was oversubscribed 2x and also saw participation from our existing investors, including those who bought into the company through the secondary (ESOP) round in H1 2021,” reads the email shared by Udaan’s CFO Aditya Pande. 

The round includes $200 million via convertible note and the rest as debt. 

The name of investors and current valuation of Udaan couldn’t be ascertained, however. It was valued at a little over $3 billion during the last round in January 2021. The company has raised around $1.4 billion to date and counts DST Global, GGV Capital, Lightspeed, Altimeter Capital and Tencent as its backers.

A convertible note is an instrument being used by startups at a pre-IPO stage, and the instrument converts into equity at the IPO. Large scale tech companies that have successfully used convertible notes include Airbnb, Uber, Spotify, Robinhood etc. This points to a possible IPO for Udaan in the near future. Multiple media reports have speculated on a possible IPO by 2023 for Udaan. 

While its B2B focus may have kept it away from the attention B2C firms garner in media, Udaan was one of the fastest startups to achieve unicorn status back in September 2018. The company has operations across categories including lifestyle, electronics, home & kitchen, staples, fruits and vegetables, FMCG, pharma, toys and general merchandise.  It claims to have a network of over 3 million users in 900 cities by connecting them to over 25,000 sellers across the country. 

While Udaan is yet to file its annual financial report for FY21, the company scaled up its revenues to Rs 978 crore in FY20 from Rs 46.3 crore in FY19. During the period, Udaan’s annual expenditure has shot up 4X to around Rs 3,488 crore from the expenses of Rs 850 crore in FY19.