Udaan, a three-year-old business-to-business e-commerce platform in India, has raised more than half a billion dollars in a new financing round as it looks to bring more Kirana stores, chemists and other small businesses online through its marketplace.
Udaan is a network-centric B2B trade platform, designed specifically for small & medium businesses in India. It brings traders, wholesalers, retailers, and manufacturers in India on to a single platform. With real insights into active trends and great B2B trade features, Udaan brings to its users the power of technology to scale & nurture their business.
The new funding of $585 Mn comes from Tencent, Altimeter, Footpath Ventures, Hillhouse, GGV Capital, and Citi Ventures. Existing investors Lightspeed Venture Partners and DST Global had also participated in the round.
“We are building Udaan as a trusted partner for small businesses across the country, to empower these entrepreneurs with technology, financial inclusivity, and supply chain capabilities to compete and win in an increasing tech and digital world.” the company said in a press release.
was founded by three 39-year-olds — Amod Malviya, Vaibhav Gupta and Sujeet Kumar, all engineers from the country’s elite Indian Institute of Technology who held key positions at online retailer Flipkart Online Services Pvt. Its logistics, payments and fulfilment platform currently connects 20,000 sellers across the country to 3 million retailers in categories from fruits and vegetables to electronics, apparel, and toys.
Udaan also offers a credit line to provide working capital to buyers and sellers on its platform, thereby addressing one of the biggest challenges faced by small and micro businesses and merchants in the nation, said Vaibhav Gupta, a co-founder of Udaan. The credit to buyers and sellers is financed by Udaan and other non-banking partners, he said.
Founded in June 2016, Udaan began its operations a year later and achieved the coveted unicorn status in September last year. So far, it has been one of the few startups to achieve a private valuation of $1 billion in the shortest possible time.
With this fund, Udaan plans to expand its marketplace in existing areas and expand into new categories. It also aims to invest in enhancing payments, fulfilment delivery and SME financing, which are key aspects of the B2B e-commerce play.
Amazon and Walmart have invested billions of dollars to create business-to-commerce marketplaces in India, but e-commerce still accounts for just 3% of the overall retail market in the country.
India’s small businesses, including many small neighbourhood stores known as Kirana, are a key part of the country’s move online. Global retailers Walmart Inc. and Amazon.com Inc., India’s largest conglomerate Reliance Industries and startups like Udaan are all rushing to digitize these small businesses, helping them ramp up to become a service point for delivering products and services to the community. Udaan has an early mover advantage against its large rivals.