Billion Dollar Unicorns: Indian B2B Marketplace Udaan Flies In

According to a 2016 report by Deloitte and the Confederation of Indian Industry, the B2B e-commerce market is expected to reach $700 billion by 2020 and is becoming a hot destination for venture capital. About $200 million was raised in 2017 for startups in the sector, up from $115 million in 2016 and $30 million in 2015. B2B e-commerce platform Udaan became one of the fastest startups to enter the Billion Dollar Unicorn Club after it recently raised $225 million.

Udaaan’s Journey

Bangalore-based Udaan was founded in June 2016 as Hiveloop Technology Pvt Ltd by Sujeet Kumar, former President of Operations at Flipkart, Amod Malviya, former CTO of Flipkart, and Vaibhav Gupta, former Senior VP at Flipkart.

Udaan is a B2B trade platform where manufacturers and wholesalers can sell their products to retailers. The company facilitates secure payments and smooth logistics. It also offers order management, accounting, payment management, and credit underwriting solutions to merchants on the platform. Udaan has Android and iOS apps, which allow sellers to discover products, chat among themselves, and buy products.

Udaan delivers to over 500 cities and picks up from sellers in over 80 cities through third party logistics. It has an average order value between INR 6K -7K (~$1K) and an average purchase rate of seven times a month. It claims to have 1,50,000 buyers and sellers from all over the country on its platform. It is currently focusing on clothing, electronics, and Food and FMCG categories.

Udaan’s Financials

Udaan recorded gross revenue of INR 1.69 crore ($230K) in 2016-17. The company had started its formal operations during the second half of the calendar year and did not generate any operational revenue. Udaan reported gross expenditure of INR 7.57 crore ($1 million) and a net loss of INR 5.88 crore ($800K).

The founders invested their personal savings of $1.5 million in the seed round. Udaan has so far raised $285 million from investors including Lightspeed Venture Partners, DST Global, and Yuri Milner. In late 2016, it had raised a series A for $10 million at a valuation of $40 million. In February this year, it raised $50 million in a Series B round at a valuation of $200 million. Last month, the company raised $225 million in a Series C round at a valuation of $1 billion.