Udaan Business Model: How Udaan Makes Money in B2B Commerce
Udaan's revenue fell 54% between FY22 and FY25 while its losses fell 66%. Here is how the B2B marketplace actually makes money, and why it chose to get smaller.
Udaan makes money in six ways, but only one of them is large. It buys goods from brands and wholesalers, sells them to small retailers through its app, and keeps the margin. In FY23, the sale of traded goods accounted for 96% of udaan's gross merchandise value.
The more interesting question in 2026 is why udaan has deliberately been earning less of it.
Udaan's operating revenue fell 54% from ₹9,900 crore in FY22 to ₹4,561.4 crore in FY25. Its net loss over the same three years fell 66%, from ₹3,132 crore to ₹1,055.4 crore.
Half the revenue, for a third of the losses. That trade is the whole story.
Who Owns Udaan and Who Founded It
Udaan is a Bengaluru-based B2B marketplace founded in 2016 by three former Flipkart executives: Amod Malviya, Flipkart's ex-CTO, Sujeet Kumar, its ex-President of Operations, and Vaibhav Gupta, udaan's CEO since September 2021.
It operates through Hiveloop Technology and is held by its parent, Trustroot Internet Private Limited (TIPL), the entity being recapitalised ahead of a planned listing.
Udaan became a unicorn in September 2018. Its valuation has since moved the other way. The January 2024 Series E cut it 43.5% to $1.7 billion, implying a peak near $3 billion. The June 2025 Series G, $114 million led by M&G Investments and Lightspeed, was flat at roughly $1.8 billion.
How Udaan Makes Money: Six Revenue Streams
- Sale of traded goods. Udaan buys inventory and resells it to retailers, earning the spread. At 96% of GMV in FY23, this is the business, and the line that has shrunk most.
- Logistics and delivery fees. Charges for collecting goods from sellers and delivering to buyers via udaanExpress, plus returns handling.
- Warehousing. Registered sellers pay to store stock in udaan facilities.
- Interest on credit. Udaan holds a non-banking financial company (NBFC) licence and lends working capital to retailers who rarely qualify for formal credit.
- Advertising. Brands and sellers pay to promote listings to platform buyers.
- Collection and value-added services. Fees for collecting buyer payments, packaging, label printing, invoicing and returns.
The credit line matters most strategically. Lending against transaction data udaan already owns is cheaper and safer than lending blind, and carries far better margins than reselling rice and detergent.
Why Udaan's Revenue Halved Between FY22 and FY25
Udaan spent its first six years buying scale, selling across 14 categories to anyone who would transact, with GMV rising every year. In FY22 that produced ₹9,900 crore of revenue and a ₹3,132 crore loss, meaning the company gave up roughly 32 paise on every rupee it booked, at increasing volume. That is the specific way marketplace businesses die. From FY23, management stopped defending the topline: it exited non-core categories, withdrew from unprofitable geographies, cut headcount three times between 2022 and December 2023, and moved to a regional cluster model in which each cluster runs its own supply, warehousing and delivery density instead of drawing on a thin national network. Udaan says that transition, over about six quarters, cut core EBITDA burn by 40%.
| Udaan Financials | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Operating revenue | INR 9,900 cr | INR 5,609.3 cr | INR 5,706.6 cr | INR 4,561.4 cr |
| Net loss | INR 3,132 cr | INR 2,075.9 cr | INR 1,674.1 cr | INR 1,055.4 cr |
| Loss per rupee of revenue | 31.6 paise | 37.0 paise | 29.3 paise | 23.1 paise |
The third row measures whether it worked, and FY23 does not flatter it. Revenue fell 43% that year while losses fell only 34%, so unit economics briefly got worse. From FY24 the lines separated properly, and by FY25 udaan lost 23.1 paise per rupee against 31.6 paise three years earlier.
Real progress. Also, after nine years, still a company losing a quarter of every rupee it takes in.
Buying Growth With Stock: ShopKirana and LYNK Logistics
Having spent three years conserving cash, udaan has started buying revenue back, and paying in shares.
| Date | Acquisition | Consideration | What it adds |
|---|---|---|---|
| 18 July 2025 | ShopKirana | All-stock; ShopKirana valued near $88.5 million (Info Edge's exchange filing valued its own exit at $23.13 million) | Retail-tech distribution, strengthening the FMCG business |
| 7 September 2026 | LYNK Logistics | All-stock at a ₹500 crore enterprise value; Swiggy takes about 3.2% of udaan | ₹668 crore of annual revenue, 100,000+ store network |
LYNK is the clearer illustration. TIPL issues Swiggy preference shares worth about 2.8% of udaan, Swiggy separately invests ₹75 crore for another 0.4%, and udaan gains a distribution business plus fresh capital without writing a cheque. LYNK's ₹668 crore of revenue equals roughly 15% of udaan's entire FY25 topline, bought in one transaction.
Who Udaan Competes With Now
Its competitive set has changed more than most profiles reflect. ShopKirana, once a direct rival, is now owned by udaan. The serious competition comes from companies that can fund losses indefinitely:
- JioMart (Reliance)
- Flipkart Wholesale
- Amazon Business
- Meesho, in adjacent categories
- ElasticRun, in rural distribution
- Moglix and Bizongo, in industrial B2B
Does Udaan's Business Model Work?
Partly, and not yet completely.
What works is the credit business and the cluster economics. What has not been shown is that udaan can grow again while holding them. Every year of improvement arrived with a smaller topline, and buying ShopKirana and LYNK with stock restarts growth without testing whether the core can produce it.
My own read is that paying in equity looks clever only while the valuation stays depressed. Udaan is issuing shares at roughly $1.8 billion, well below its own 2021 peak. If the IPO reprices the company upward, these will turn out to have been expensive purchases made at the bottom. The FY26 and FY27 accounts, with LYNK consolidated, will settle it, and they arrive attached to a prospectus.
FAQs
How does Udaan make money?
Udaan mainly buys goods from brands and wholesalers and resells them to small retailers at a margin, which was 96% of its gross merchandise value in FY23. It also earns from udaanExpress delivery fees, warehousing, advertising, interest on working-capital loans through its NBFC arm, and collection and packaging services.
What is Udaan's revenue and loss?
Udaan's operating revenue was ₹4,561.4 crore in FY25, down about 20% from ₹5,706.6 crore in FY24, while its net loss narrowed 37% to ₹1,055.4 crore. Over three years, revenue fell 54% from ₹9,900 crore in FY22 and the loss fell 66% from ₹3,132 crore.
Why did Udaan's revenue fall?
The decline was deliberate. From FY23 udaan exited non-core categories and unprofitable geographies and moved to a regional cluster-based operating model, which it says cut core EBITDA burn by around 40%. It accepted lower revenue in exchange for better unit economics ahead of a planned IPO.
Who owns Udaan?
Udaan operates through Hiveloop Technology and is held by its parent company, Trustroot Internet Private Limited (TIPL). It was founded in 2016 by Amod Malviya, Sujeet Kumar and Vaibhav Gupta, all former Flipkart executives.
Which companies has Udaan acquired?
Udaan acquired retail-tech startup ShopKirana in an all-stock deal on 18 July 2025, and agreed to acquire Swiggy's LYNK Logistics on 7 September 2026 at a ₹500 crore enterprise value, also in stock, leaving Swiggy with roughly a 3.2% stake in udaan.
