E-commerce B2B Retail player Udaan may Mount debt funding

Bengaluru-based retail start-up Udaan is focusing on new ways of capital raising. As per sources, the company is looking for debt funding from global institutional investors.

In an interview, one of the co-founders of Udaan, Vaibhav Gupta, said, public market investors, want to come into the private market now, recently budgeted hotels start-up OYO Rooms also raised around $600 million debt funds aiming to use the capital to reduce the part of existing debt and bolster its tech capabilities. 

Further, he added, some investors are looking to invest ahead of the company’s listing as they believe that they may have to pay a lower premium. The fundraising tools have become more sophisticated, when you can raise debt at a cheaper rate, why dilute? You need to be watchful.  

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Udaan is a B2B trade platform that brings manufacturers, traders, retailers, and wholesalers into a single platform. with a vision to transform the trade ecosystem in the country leveraging technology, Udaan is one of the India’s largest b2b eCommerce platforms that is empowering small businesses through the power and scale offered by eCommerce.

Udaan, which competes with brick-and-mortar wholesale retail such as Carry, Metro Cash, Reliance, etc., as well as its online peers such as Walmart owned Flipkart, Amazon sells goods to other businesses, including Kirana stores. The average ticket price on the platform is currently around Rs. 8,000 marks. We are looking to increase our sales to around 1 lakh tonnes every day in 5 years from the 5,000 tonnes that we are currently doing, said Gupta.

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The company has a national reach of 15 million manufacturers, 25–30 million retailers, 10–12 million institutional businesses like schools, offices, and HoReCa. The aim is to encourage and empower small businesses with technology, supply chain capabilities and financial inclusivity, to compete in an increasing tech and digital world.

Founded in 2016, the Indian start-up Udaan achieved the status of a unicorn in 2018 and became the fastest company to do so. It reached this milestone in just 26 months which is a record.

The company helped more than 400 electronics goods sellers to achieve the sales of worth one crore rupees each in 2020, crediting its growth to demand by people working at home during the coronavirus pandemic. Under the electronics business segment, the company has shipped over 160 million products during the last year, 2020. About 2.8 million retailers placed orders for 53 lakh electronics products at the platform. Around 2.2 million smartphones, 7.8 million feature phones, and over 120 million consumer electronic products and accessories were shipped across 900 towns and cities and 12,000 pin codes.