Amid funding crunch, Udaan raises $120 million, eyes IPO in year’s time| Roadsleeper.com
- The B2B e-commerce platform welcomes the latest fundraising, especially as the startup industry is currently going through a tough time finding investors to pump in the money.
- A recent report by PwC India stated that
start-up funding hit a two-year low of $2.7 billion in 205 deals in the July-September quarter. - Udaan also aims to go public in the next 12-18 months.
- The company has been restructuring its business model and focusing on cost efficiency as it aims to achieve profitability soon. Currently, Udaan is among the top loser unicorns.
While the entire startup ecosystem is facing a funding crunch this year, this peripheral startup—a business-to-business (B2B) e-commerce platform called Udaan—has raised $120 million in convertible notes and debt.
With this round, the total capital raised by Udaan through convertible notes and debt in the last four quarters has crossed $350 million. Udaan enables small producers, farmers and brands to market and sell their products across the country at low cost with 100% payment security and complete transparency.
The company welcomes the latest fundraising, especially as the startup industry is currently going through a tough time finding investors to pump in the money.
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“Despite the funding challenges facing the larger startup ecosystem, this fundraising reflects investors’ confidence in our business model and their support for the path to modular economics, driven by the significant progress in our business model development and cost efficiencies that we initiated last year.” Udaan CFO Aditya Pande said in a mail to employees.
In fact, a recent PwC India report found that venture capital funding hit a two-year low of $2.7 billion across 205 deals in the July-September quarter.
Moreover, only two startups in India achieved unicorn status in the same quarter. This reflects a global trend that also saw a decline in the number of new unicorns last quarter.
Analysts have struggled to predict the bottom line of the funding downturn as investors remain cautious in a volatile environment.
“It is difficult to predict how long the funding slowdown will last, but it is clear that both founders and investors are becoming more selective and cautious in their deals,” said Amit Nawka, India partner and startup leader at PwC India.
Additionally, B2B e-commerce is set to go public in the next 12-18 months.
The company has been restructuring its business model and focusing on cost efficiency as it aims to achieve profitability soon. Currently, Udaan is among the top loser unicorns.
It has now become crucial for startups to achieve profitability before going public as investors have become very wary of investing in loss-making startups as seen in the cases of Nykaa, Paytm and Zomato.
