Udaan Secures $114 Million in Flat Funding Round Valued at $1.8 Billion
Bengaluru-based B2B e-commerce platform Udaan has successfully secured $114 million in a recent Series G funding round, led by M&G Investments and Lightspeed. This funding round attracted both existing and new investors, allowing Udaan to bolster its presence in the fast-moving consumer goods (FMCG) sector and expand into underserved markets. The company is now valued at approximately $1.8 billion, maintaining the same valuation as its previous funding round earlier this year.
Funding Details and Valuation
Udaan’s latest funding round is characterized as a flat round, meaning the company’s valuation has remained stable since its last investment. In 2023, Udaan raised $340 million at the same valuation, which represents a significant drop from its peak valuation of $3.2 billion in 2021. The company, founded by former Flipkart executives Vaibhav Gupta, Amod Malviya, and Sujeet Kumar, has been undergoing a restructuring process since 2022. This restructuring aims to enhance profitability in a more cautious funding environment. As part of this strategy, Udaan has streamlined its operations and reduced its scale to manage costs effectively.
Operational Restructuring and Leadership Changes
Since its inception in 2016, Udaan has focused on various verticals, including FMCG, pharmaceuticals, staples, and fresh produce. The company claims to hold around 70% of India’s eB2B market share. In recent years, Udaan has shifted its operational model to prioritize profitability and efficiency. Co-founders Malviya and Kumar have stepped back from daily operations, with Gupta currently serving as CEO. The company has reported a 40% annual reduction in EBITDA burn over the past three years, indicating a significant improvement in its financial health.
Future Plans and Growth Strategy
The fresh capital raised will be instrumental in enhancing Udaan’s technology infrastructure, particularly in customer engagement and sales technology. The company serves a vast network of small businesses, retailers, and suppliers across India. Additionally, Udaan offers working capital solutions through its financial services arm, UdaanCapital. Gupta emphasized that this funding marks a crucial milestone in their journey toward a potential public market listing. Udaan aims to achieve group-level EBITDA profitability within the next 18 months, driven by a hybrid model that combines a digital platform with technology-led sales.
Performance Metrics and Market Position
Udaan has reported impressive growth metrics, including over 60% year-on-year revenue growth for the calendar year 2024. The company has also improved its contribution margins by more than 300 basis points during this period, with an additional gain of 100 basis points reported year-to-date in 2025. Furthermore, Udaan successfully reduced its fixed costs by 20% last year, contributing to overall margin improvements. With a focus on profitable growth at scale, Udaan is pursuing a cluster-led operating model that emphasizes technology-driven distribution and private label expansion in staples.
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