B2B e-commerce unicorn Udaan has received $160 million in fresh funding as it readies for an IPO, Business Standard reports. The financing is a combination of fresh equity, new debt and conversion of part of its convertible bonds into equity.
The capital raise also attracted existing investors M&G Investments and Lightspeed Venture Partners, but international asset management giant BlackRock also joined as a new investor. The funding will strengthen Udaan’s balance sheet and support its long-term growth strategy as it goes through the process of being public.
Referring to the development, Vaibhav Gupta, Co-founder and Chief Executive Officer of Udaan, said the funding is a huge step in Udaan’s growth.
The financing round represents yet another step in Udaan’s journey towards building a sustainable, profitable and institutionally resilient business, Gupta said.
The company is focused on improving operational efficiency, reducing cash burn and moving towards profitability in recent years. The fresh capital will help in these efforts and give it some financial flexibility ahead of the IPO.
The transaction is subject to customary closing conditions, final documentation and regulatory approvals before it is formally completed, according to the report.
In 2016, Udaan became one of India’s leading business to business (B2B) e-commerce platforms connecting manufacturers, wholesalers, retailers and traders for different product types. It has enabled India’s wholesale trade to be digitised and provides technology-driven procurement, logistics and financial services as well.
The investment is the result of investors still investing in Udaan despite uncertain market conditions for startups. And BlackRock, one of the world’s largest asset managers, being one of the key investors in the company, is an indication of the long-term growth prospects of the firm.
As the startup ecosystem in India gradually recovers and capital markets continue to be open for good public offerings, Udaan’s successful fundraising could help the company to strengthen its position ahead of an IPO. Investors will closely monitor the company's growth in revenues and profitability, as well as regulatory milestones in the next few months going forward.
With new capital on hand and institutional support from the world’s best global investors, Udaan seems to have an excellent financial foundation for the next stage of its growth strategy to build its foundation.
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