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Lightspeed-backed udaan raises $120 million


B2B commerce platform, udaan, has recently concluded a fund raise of about $120 million in convertible notes and debt, led by existing shareholders and bondholders.

With this round, the total funds raised by udaan through convertible notes and debt in the last four quarters have crossed $350 million, making it one of the largest structured instrument fund raises in the country.

In a note to its employees, udaan says despite the funding related challenges being experienced by the larger startup ecosystem, this fund raise reflects the confidence of investors in its business model and an endorsement of the journey to unit economics, driven by great progress in evolution of our business model and cost efficiency, that we initiated last year.

“These steps have not only helped us achieve positive unit economics last quarter, but also improved efficiency in the system, with huge cost benefits, which is key to building a sustainable business, and being public market ready in 12-18 months,” said the internal note to its employees.

Chief financial officer, Aditya Pande, also listed some of the key achievements of the company, where unit economics has improved by about 1000bps with equally strong improvements in both gross margins and operating cost.

“The journey of right business design & unit economics has translated into a 60%+ reduction in burn. Continued focus on customer-first thinking & initiatives on strengthening our value proposition for them have resulted in monthly buyer repeat rates increasing by 500+bps in the last 2 quarters,” said the note from Pande.

Started by Amod Malviya, Vaibhav Gupta, and Sujeet Kumar, Udaan has been looking to raise funds over the last few months. It had laid off about 5% of its workforce in June to conserve cash.

“While it is heartening to see the progress that we have already achieved, there is still a journey ahead of us in our endeavour to build a sustainable business, especially in the increasingly challenging global market conditions. However, the success of our various initiatives and endorsements from investors further strengthens our commitment to continue making focused interventions that are critical to our plans of achieving profitability. With your support, we will continue to invest to build udaan as a professionally run organisation with scale, capabilities and resilience that can leverage the huge opportunity that Kirana commerce offers, while empowering the small businesses of Bharat,” said the note.

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