Bengaluru-based B2B e-commerce giant Udaan has once again demonstrated its robust growth trajectory, securing a significant $114 million (over Rs 970 crore) in fresh equity funding. This latest injection, predominantly from existing investors M&G Investments and Lightspeed Venture Partners, brings Udaan’s total capital raised to an impressive $2 billion, signaling strong investor confidence as the company gears up for a planned public listing in 2026. This funding round, a continuation of its Series G, follows an earlier $75 million infusion this year from the same backers, highlighting sustained commitment to Udaan’s vision.
Strategic Deployment: Fueling Growth in High-Volume Verticals
Udaan, founded in 2016, has revolutionized the B2B landscape in India by efficiently connecting manufacturers and wholesalers with small retailers across diverse categories like FMCG, electronics, lifestyle, pharmaceuticals, and agricultural staples. The company has articulated a clear strategy for the newly acquired funds: a strategic expansion into high-volume verticals. This includes a particular focus on the fast-moving consumer goods (FMCG) sector and the burgeoning HoReCa (hotel, restaurant, and catering) segment. These areas represent not only significant scale potential but also promise attractive margin upside, aligning with Udaan’s broader financial objectives.
Doubling Down on Private Labels and Profitability
A key element of Udaan’s growth strategy is its commitment to private-label offerings, especially within the staples category. This move is a calculated effort to enhance contribution margins while simultaneously sustaining top-line momentum. The results are already evident: Udaan reported over 60% year-on-year growth in contribution margin in calendar year 2024, with a 300-basis-point improvement. This positive trend has continued into 2025, with an additional 100 basis points improvement recorded so far.
Vaibhav Gupta, co-founder and CEO, emphasized the company’s laser focus on profitability. He stated that Udaan has successfully reduced its EBITDA burn by 40% annually over the past three years, with an ambitious goal of achieving group-level EBITDA profitability within the next 18 months. Gupta highlighted building “cost as a capability and a competitive advantage,” a testament to their operational efficiency. In FY24, Udaan’s revenue from operations saw a modest 1.7% increase to Rs 5,706 crore, but critically, its net loss narrowed by nearly 19% to Rs 1,674 crore. This financial discipline is further underscored by a 20% reduction in fixed costs last year, followed by another 20% cut so far in 2025.
Strengthening the Ecosystem: UdaanCapital and IPO Readiness
Beyond its core e-commerce operations, Udaan continues to bolster its fintech arm, UdaanCapital. This crucial component provides vital working capital loans and credit products to small merchants and manufacturers within its ecosystem, further solidifying its value proposition.
In preparation for its highly anticipated IPO, Udaan received approval in January from the National Company Law Tribunal to consolidate its various business entities under Hiveloop E-Commerce. This strategic move simplifies its corporate structure, a necessary step to streamline operations and enhance transparency in the run-up to a public listing. With India’s B2B e-commerce sector projected to surge to over $125 billion in gross merchandise value by 2027, according to Avendus Capital, Udaan is exceptionally well-positioned to capitalize on this immense market opportunity. The recent funding round is a clear indicator that Udaan is not just growing, but strategically evolving to lead the charge in India’s dynamic B2B e-commerce landscape.
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