Bengaluru-based B2B marketplace Udaan has landed a USD 280 million check from new and existing investors as it looks to strengthen its position in the market by focusing on millions of small retailers including mom-and-pop shops in the world’s second-most-populous country.
In its extended Series D round, Udaan brought two new investors, Octahedron Capital and Moonstone Capital, on its cap table. Existing backers including Lightspeed, DST Global, GGV Capital, Altimeter, and Tencent also participated in the round, which values the company at about USD 3.1 billion, according to local media Economic Times. The latest round takes the total funding of Udaan to USD 1.15 billion to date.
This is a follow-on round to the USD 585 million the company raised in October 2019. Udaan plans to use the fresh funds to expand its market share in the B2B e-commerce segment as well as enhance its business capabilities to serve small and medium businesses. There are an estimated 15 million small and mid-sized retailers that power close to 85% of the country’s retail sales. According to research firm RedSeer, e-B2B is projected to cross USD 60 billion by 2025.
The company also said it will invest in expanding the selection of products, growing SME financing capabilities, and strengthening its supply chain infrastructure.
“Covid-19 has accelerated the already fast digital-led evolution of the highly fragmented and unorganized Indian retail industry,” Amod Malviya, cofounder of Udaan, said in a statement. “At the same time, the pandemic also highlighted the unique structure of the Indian economy, with millions of kiranas (corner stores) and neighborhood stores becoming the lifeline of our country at the time of crisis.”
Founded in 2016, Udaan connects small and medium-sized retailers with manufacturers and vendors and claims to have a network of three million users and 25,000 sellers across 900 cities. It became one of the fastest startups to achieve unicorn status in September 2018. Currently, it is present across the segments such as lifestyle, electronics, home and kitchen, staples, fruit and vegetables, FMCG, pharma, toys, and general merchandise.