Indian commerce startup Udaan, has raised $200m via convertible note financing and an additional $50m as debt in a funding round in which new and existing investors participated, a report by TechCrunch has revealed.
Aditya Pande, chief financial offer of Udaan, reportedly told employees in an internal email that the round was oversubscribed by two times and saw five new investors become shareholders in the company.
Although the email did not reveal the names of the new investors, TechCrunch reported that Tor Investment and Arena Investors are among those who have invested. Udaan is also backed by venture firm Lightspeed, DST Global and China’s Tencent.
Founded in 2016 and headquartered in Bangalore, Udaan connects small retailers with wholesalers and traders by offering a B2B marketplace to allow merchants best value for money. The startup currently serves more than 3 million retailers and small and medium-sized businesses (SMBs) and it has signed up thousands of brands, including Coca-Cola, PepsiCo, Boat Lifestyle, Micromax, HP, LG, ITC, HUL and P&G.
The company raised $585m in its Series D funding round in October 2019, reaching a valuation of $1.9bn. Tencent, GGV Capital, DST Global, Altimeter Capita, Hillhouse Capital Group, Footpath Ventures, and Citi Venture were the lead investors. The startup extended this round just a few months later in January 2021, raising a further $285m. The company’s valuation now stands at $3.1bn.
Udaan’s chat feature allows users to have a personal and secure conversation in real-time. It enables a direct connection between buyers and sellers which allows one-on-one discussions to negotiate terms of trade between transacting parties. According to Udaan, India has over 50 million SMBs, who form the core of the Indian economy and society. They, the company added, are the “entrepreneurial pulse of India.”
Amod Malviya, co-founder of Udaan, said in a statement that the coronavirus pandemic, which prompted New Delhi to order a nationwide lockdown and put restrictions on e-commerce firms, underscored the significance of small businesses.
The funding round comes at a time of significant growth in FinTech in India. A huge portion of India remains underbanked and underserved financially, which gives ample opportunity for FinTechs to transform the country’s financial and banking services for consumers and businesses.
There is much to look out for in FinTech in India. A report by Invest India revealed that of the 2,100+ FinTechs existing in India, over 67% have been set up in the last five years. As of December 2021, the country has over 17 FinTech companies that have recently gained Unicorn status. In addition, The FinTech transaction value size in India, according to the report, is set to grow from $66bn in 2019 to $138bn in 2023, at a CAGR of 20%.
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