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B2B E-commerce Platform Udaan Secures $340M in Series E Funding, Valued at $1.3B

B2B e-commerce platform Udaan recently announced a significant funding round of $340 million in Series E, co-led by M&G Plc and Lightspeed Partners Venture, along with participation from existing investors such as DST Global, Tencent, Altimeter Partners, and Apoletto Limited. While the company didn't disclose specific details about the funding round at the time of the announcement, regulatory filings have now revealed the breakdown of the Series E round and its impact on Udaan's valuation.



The regulatory filings indicate that Udaan issued 10,15,753 Series E Compulsorily Convertible Preference Shares (CCPS) at an issue price of $338.6 per share, raising approximately $340 million. Lightspeed contributed $160 million, M&G added $157 million, while DST Global, Tencent Cloud, Altimeter Partners, and Apoletto Limited invested $10.46 million, $11.83 million, $3.63 million, and $1 million, respectively.


However, the filings also reveal a substantial reduction in Udaan's valuation. According to data intelligence platform TheKredible, the company's valuation has seen a significant haircut of 59.3%, bringing it down to $1.3 billion post-allotment of the Series E round. This marks a notable decline from its peak valuation of $3.2 billion in January 2021.


Udaan has experienced a challenging period as it sought new equity capital, with reports in August 2023 indicating that the company was aiming for a valuation between $1 billion and $1.5 billion. The recent funding round appears to have resulted in a valuation of $1.3 billion, reflecting a 48% reduction from its peak valuation.


In addition to the Series E round, Udaan secured an additional $33 million in the Series F round from Microsoft Corporation, Tencent Cloud, and its co-founder Sujeet Kumar, contributing $27.55 million, $2.82 million, and $2.7 million, respectively. While the company confirmed that these funds were part of the same Series E round, different commercial constructs led to the nomenclature of a separate Series F extension. The higher price of the shares issued in this extension contributed to the $1.7 billion valuation.


Lightspeed now holds the largest external stake in Udaan, with a 35.7% ownership, followed by DST Global and M&G Plc, collectively holding 19.59%. The co-founders—Sujeet Kumar, Amod Malviya, and Gupta Vaibhav—own a combined 16.45% of the company.


Despite the funding challenges and valuation adjustments, Udaan continues to operate its marketplace across various categories, serving over 3 million retailers in 900 cities. The company reported a decline in Gross Merchandise Value (GMV) during the fiscal year ending March 2023, with a 43.1% year-on-year decrease to Rs 5,629 crore compared to Rs 9,900 crore in FY22. However, its losses also diminished by 33.7% to Rs 2,076 crore in FY23.


The funding and valuation dynamics highlight the evolving landscape of B2B e-commerce in India and the challenges faced by companies in the sector. Udaan's ability to secure funding, albeit at a reduced valuation, underscores its resilience and commitment to navigating the changing market conditions while continuing its mission to connect retailers across the country. As Udaan moves forward, the funding will likely play a crucial role in supporting its strategic initiatives, addressing market challenges, and driving the next phase of growth in the B2B e-commerce space.

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