According to media reports, B2B ecommerce giant Udaan is in talks with UK-based savings and investment firm M&G Prudential to lead an equity round. The startup has been struggling to raise fresh funds for quite some time now.
As per the report, the fresh round is likely to be around USD 100 million to USD 150 million in size. This will probably mark down Udaan’s valuation to under USD 2 billion from its previous USD 3.2 billion valuation, which will be a 37 per cent markdown.
Currently, M&G is conducting research and there may be new investors joining the startup soon. Last year, M&G invested in Udaan through convertible notes.
In January 2022, Udaan raised USD 200 million in debt financing by issuing convertible notes to five new investors, including Tor Investment, Arena Investors, and M&G Investments.
All these investors, including M&G Investments, will be converting the debt into equity in this ongoing funding round.
The startup is undergoing a significant restructuring. It recently merged the Essentials and Discretionary businesses. Vivek Gupta, who headed the Essentials business, stepped down but remains an advisor to Udaan’s board. In the last fiscal year, Udaan’s operating revenue decreased by 43 per cent to Rs 5,609 crore from Rs 9,897.3 crore.
In FY23, the startup laid off around 350 employees to reduce costs. Some reports suggest the layoff count could have been as high as 1,000.
Udaan, founded in 2016 by Gupta, Sujeet Kumar and Amod Malviya, focuses on supply chain and logistics operations for B2B trade. It claim to enable daily delivery to over 1,000 cities and 12,500 pin codes through udaanExpress.
Udaan has raised USD 1.8 billion in funding so far and has notable supporters like Lightspeed, Microsoft, Tencent, among others. It competes directly with Dealshare.