Udaan Success Story - How it Simplified B2B Trading?

Anik Banerjee Anik Banerjee Purbalee Dutta Purbalee Dutta
Jul 14, 2022 15 min read
Udaan Success Story - How it Simplified B2B Trading?

Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Udaan.

The world of consumers has been ever dependent on traders, wholesalers, retailers, and manufacturers for countless products that they need to survive. Though it has become less of a hassle for the consumers now with the birth of e-commerce, it has indeed been troublesome for the others of the distribution channel.

For all the existing retail shops and shop owners or the individuals who sum up the wholesaling and retailing segment of the market, it has been not been easy for them to connect with the others in the distribution channel and vice versa. This is why the B2B eCommerce platform has come into being, to make everyone seem connected in the chain. Udaan is currently operating as a market leader in this segment with a staggering market share of 80%.

Udaan is designed to connect and help the traders, retailers, and wholesalers for the small and medium businesses of India. The B2B trading platform in India, Udaan's platform supports a wide variety of categories like electronics, home and kitchen, fruits and vegetables, toys, and more. So, here's taking a dive into the success story of Udaan where we will check out everything about Udaan, its Startup Story, Udaan Valuation, Founders and Team, Business model, Revenue model, Logo, Funding and investors, Competitors, Growth, Future Plans, and more below.

Company Highlights

Startup Name Udaan
Headquarters Bengaluru, Karnataka, India
Sector E-commerce
Founders Amod Malviya, Vaibhav Gupta and Sujeet Kumar
Founded 2016
Total Funding $1.5 bn (January 2022)
Valuation $3.1 bn (November 2021)
Revenue $800.30 mn (Rs 5919 crore in FY21)
Parent Organization Trustroot Internet Pvt. Ltd.
Website udaan.com

Udaan - About
Udaan - Industry
Udaan - Founders And Team
Udaan - Startup Story
Udaan - Mission and Vision
Udaan - Name, Tagline and Logo
Udaan - Business Model
Udaan - Revenue Model
Udaan - Startup Challenges
Udaan - Funding And Investors
Udaan - Acquisitions
Udaan - Competitors
Udaan - Growth and Revenues
Udaan - Partnerships
Udaan - Awards and Achievements
Udaan - Future Plans

Udaan - About

Udaan is a (B2B) Business-to-Business e-commerce platform. The company helps its users to grow their businesses by leveraging the power of technology. It is popularly known as one of the largest national distribution platforms of its kind that has already attained unicorn status, thereby becoming one among the unicorns of India, when it raised around $225 million in 2018.

With an aim to make business easy in India, it provides its users, access to new markets. Furthermore, it also provides financial products for the sellers and buyers of the country as well. The goal of the company is to bring traders, manufacturers, wholesalers, and retailers under a single platform.

Udaan Sellers

Selling on the Udaan platform, thereby becoming one of the Udaan sellers is not difficult anymore. Udaan helps the persons wanting to sell their products on Udaan easily by:

  • Offering an easy registration and on-boarding process where only the bare minimum details are required
  • Making catalogue creation easy and effective
  • Supporting the commonly used trade constructs
  • With the help of an effective logistics system, backed by the best courier service providers in India
  • Full compliance
  • Easy returns Β 

Udaan - Industry

The Indian eCommerce industry needs no introduction. Ecommerce is more like a household term today with numberless big and small players operating in the segment. The e-commerce industry of India will be reaching $99 bn by 2024, as per a recent Goldman Sachs report. B2C is the largest segment in operation here. Though B2B is a relatively newer segment, it is not backed by any less potential than the former. Udaan is one of the prominent players operating in the B2B eCommerce space, which is estimated to witness a growth at a CAGR of around 20% till FY25.

Udaan - Founders And Team

Amod Malviya, Vaibhav Gupta, and Sujeet Kumar are the founders of the company Udaan.

Amod Malviya (left), Vaibhav Gupta (middle) and Sujeet Kumar (right)

Amod Malviya

Amod Malviya is the Founder and the Engineer of Udaan. Malviya prominently served as the Chief Technology Officer at Flipkart for a period of more than 5 years. Itellix Software Solutions, Riya Internet Technologies Pvt Ltd, and ApnaPaisa Pvt. Ltd. are some other companies where Amod has served as Software Engineer, Sr. Software Engineer, and V.P Engineering respectively before founding Udaan. Amod Malviya was an alumnus of the Indian Institute of Technology, Kharagpur, from where he completed his B.tech in Electrical Engineering.

Vaibhav Gupta

Vaibhav Gupta is another founder of Udaan, who was also appointed as the CEO of the company in September 2021. Vaibhav was also a previous employee at Flipkart, which he joined after serving as an Engagement Manager and Senior Consultant at McKinsey & Company and Trilogy E-Business Software India Ltd. respectively. Gupta is also an IITian, who graduated from IIT Delhi with Computer Science & Engineering. He then pursued his MBA from the University of Virginia, Darden Graduate School of Business Administration.

Sujeet Kumar

Sujeet Kumar is the co-founder of Udaan. He pursued his B.Tech in Civil Engineering from the Indian Institute of Technology, Delhi. Sujeet was appointed as the President of Operations at Flipkart, where he served for over 3 years before founding Udaan.

Udaan operates with a an employee strength between 1001-5000, as per its Linkedin profile.

Udaan - Startup Story

β€œAlmost 94% of product sales in India happen through mom-and-pop stores. But small store owners have major sourcing and supply chain problems. We felt catering to their needs is a huge opportunity," said Udaan Co-founder Sujeet Kumar.

The initial idea of starting Udaan by the ex-Flipkart employees was fueled by their desire to empower the small and medium scale businesses of India.

Initially, Udaan started as a logistic platform for small buyers and sellers in electronics. They focused on electronics during the first 8 - 10 months and with this, Udaan managed to be in the limelight within the boundaries of the country, which was very important for them as a startup company. The primary requisite of Udaan was to develop the database strongly before stepping into the supply business. The B2B trading platform is now eyeing to emerge as a lending platform for merchants.

Udaan - Mission and Vision

The vision of Udaan is to "transform the way trade is done in India leveraging technology."

The leading ecommerce platform in India is built with an aim "to be a trusted partner to small businesses by empowering them with technology, financial inclusivity, and supply chain capabilities to compete and win in an increasingly tech and digital world."

Udaan Logo

Udaan's tagline or slogan reads as Khole Munafe Ka Shutter.

Udaan - Business Model

Udaan is the asset-light player based on its business model. It has got no plans to own an asset. Being a B2B e-commerce platform, Udaan helps businesses to discover various customers, suppliers, and products across different categories in order to make the best deals possible. The company also facilitates secure payments and offers additional logistics support.

Udaan offers accounting, order, and payment management solutions to the merchants registered on its platform. It provides the working capital (funds) to the retailers at reasonable rates. So, basically, Udaan is not only a platform for retailers and wholesalers but also helps in underwriting loans for small businesses.


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Udaan - Revenue Model

The revenue model of Udaan can be laid out as:

  • Revenue from Logistics: As logistics is an important part of the services of Udaan, it also serves as a revenue driver for the company. Udaan collects delivery charges from the market participants against the services it provides, associated with the pick up of goods from the seller’s premises and delivering the same to the buyers. The company also receives fees for collecting any return of sales from the customers.
  • Warehousing services: Udaan offers storage and warehousing services for the sellers who are registered with the platform in order to deliver goods faster to the buyers, which in turn generates revenues for the company.
  • Receivable collection services: Udaan also collects fees from receivable management services that include the collection of payments from buyers in cash on behalf of the sellers or accepting payments online on behalf of the sellers.
  • Advertisement services: The advertisement services that Udaan provides, where the company promotes the product listings to ensure better visibility among the buyers of the platform also contributes to a part of their revenues.
  • Interest from credit: Udaan also offers credit to its merchants and traders via its NBFC arm, which helps them meet their working capital requirements. This service of Udaan helps the company generate interests, which thus becomes an important source of revenue for the platform.
  • Other value-added services: Udaan offers numerous other fee-based value-added services to the businesses that are registered on its platform. These services consist of packaging and printing labels on products, the printing of invoices, and returns management services, which also add up to the total revenues of the company.

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Udaan - Startup Challenges

The main struggle of Udaan was "to find the right product and market mix." Though Udaan has already carved its own niche in the B2B marketplace, to stand onto its lead is a big challenge indeed.

Persuading the retailers and convincing the wholesalers to go online with their business is another challenge that Udaan had to face initially.

Establishing a proper supply chain network is another major challenge for B2B e-commerce firms like Udaan, which the Bengaluru-based B2B startup is currently working on.

Udaan Layoffs

Udaan has laid off around 180 employees as per reports dated June 28, 2022. This recent batch of layoffs was reportedly done to cut costs. However, Udaan has mentioned that it would be providing its employees all the required support like medical insurance for self and family, compensation package, placement assistance and more. Another source has revealed that this is only the initial stage of layoffs and that the numbers can go as high as 600. Β  Β  Β 

Udaan had earlier laid off around 1000 employees at the start of FY21 when the first wave of the pandemic peaked in order to conserve its capital.

Udaan vs Parle

Udaan had earlier filed an antitrust case against Parle Products Private Limited. In it, the B2B unicorn had alleged that Parle had abused its dominant position in the market. However, this has been rejected straightaway by the Competition Commission of India (CCI), which stated that it didn't find any abuse. Besides, the Udaan plea, which mentioned that Parle refused to directly supply the products that are highly in demand, is devoid of any "objective justification". The issue arose due to the under-supply of the Parle-G biscuits, which commands nearly 83% of the market share, for Udaan. The Parle-G biscuits are among the best-selling biscuits brand in the Indian market. However, with Parle not giving Udaan an adequate supply of their Parle-G biscuits, the company sought to procure them from the existing Parle distributors in the open market.

Parle, in its defence, submitted a terse that aimed at criticising the Udaan business model. It said that the business model of Udaan is inclined to raise funds and accumulate debts, and is a massive loss-making firm year-on-year. This makes Parle sceptical about the long-term viability of Udaan as a reliable partner in contrast to Parle's brick-and-mortar distributors.

Udaan - Funding And Investors

Udaan has raised a total amount of $1.5 Billion in funding over the 11 funding rounds that it has seen. The last funding round for the company came in on January 5, 2021, where Udaan raised $250 mn via convertible note and debt. This happens to be the first funding round for the Bengaluru-based B2B startup in the past 12 months. $200 mn of this recent round was raised via convertible note and the rest via debt. The software giant Microsoft has also joined this convertible-debt round of funding, where numerous other investors like M&G Prudential, Kaiser Permanente, Nomura, TOR, Arena Investors, Samena Capital, and Ishana Capital, have also participated, as per the reports dated April 18, 2022. Udaan is currently valued at slightly over $3 billion, as per the reports revealed after its last funding round.

The previous Udaan funding on November 18, 2021, was a debt round when Udaan raised close to $6.73 million (Rs 50 crore) Blacksoil, Corsa Ventures, VBG Group, and Walton Street India.

Here's look at the prominent Udaan funding rounds that the company has seen to date:

Date Transaction Name Money Raised Lead Investors
January 5, 2022 Convertible Note $200 Million Microsoft, M&G Prudential, Kaiser Permanente, Nomura, TOR, Arena Investors, Samena Capital and Ishana Capital
January 5, 2022 Debt Financing Round $50 Million Microsoft, M&G Prudential, Kaiser Permanente, Nomura, TOR, Arena Investors, Samena Capital and Ishana Capital
November 18, 2021 Debt Financing Round $6.73 Million Corsa Ventures, VBG Group, and Walton Street India, Blacksoil
November 6, 2021 Debt financing round $10 Million InnoVen Capital
September 25, 2021 Debt financing round $6.7 Million BlackSoil Capital
January 6, 2021 Series D $280 Million DST Global, Octahedron Capital, Lightspeed Ventures
March 23, 2020 Venture Round $30 Million Trustroot Internet
October 2, 2019 Series D $585 Million Altimeter Capital, Citi Ventures, DST Global, Footpath Ventures, GGV Capital, Hillhouse Capital Group, Tencent Holdings
September 3, 2018 Series C $225 Million DST Global, Lightspeed India Partners
February 21, 2018 Series B $43.42 Million Lightspeed Venture Partners
November 23, 2016 Series A $10 Million Lightspeed Venture Partners

Udaan has received funding from over 11 investors among which Octahedron is the most recent investor for the brand.

The B2B eCommerce marketplace had already eyed to raise up to Rs 2,000 crores by allotting NCDs (Non-Convertible Debentures) and got approval from its shareholders for the same. This round was finally completed on January 5, 2022, when the B2B unicorn startup raised Rs 1860.35 crore ($250 mn). Β 

Udaan - Acquisitions

With no acquisitions under Udaan's belt, the B2B ecommerce unicorn is reportedly willing to Metro Cash & Carry, the Indian wholesale unit of Metro AG, as far as reports dated July 14, 2022, go. Seeing the condition of Metro Cash & Carry, which is battling losses, many deep-pocketed suitors have also lined up, which includes Tata, Amazon, Reliance, DMart, Charoen Pokphand Group of Thailand, and Swiggy. Metro Cash & Carry has around 31 stores in India, and has approached 10+ companies already, to sell its Indian subsidiary at a price between $1.5-1.7 bn. The Metro AG's loss-ridden unit posted a loss of Rs 23.33 crore, against a turnover of Rs 6,915.3 crore in FY20, and expects to sell out by September 2022.

Udaan - Competitors

Here's to mention the top Udaan competitors in India:


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Udaan - Growth and Revenues

Udaan is growing. A wide range of merchants, farmers, shopkeepers, owners, restaurants, chemists, and street vendors are connected to Udaan. It has got a big supply chain network throughout India to fulfill more than half of the orders on its platform. Udaan now boasts of having more than 5 lakh products on its platform. Being the largest B2B platform of India, Udaan claims to have 30+ lakhs of retailers, 25K+ sellers who are currently connected with the brand, which now operates in more than 900 cities.

Udaan Financials

Udaan Revenue

The five-year-old company saw its revenues successfully scale to over 21X, thereby becoming Rs 978 crore during FY20, which was around Rs 46.3 crore in FY19. Udaan witnessed its revenues grow 6X times to stand at Rs 5,919 crore in FY21, as per reports dated January 12, 2022. The sale of the traded goods was the primary revenue driver during this fiscal, which contributed around 94.41% of the annual revenues. The collection of the platform fees, commissions from financing services, revenue from delivery and cash collection, credit facilities, sales of returned goods, and more made up the remaining amount. The company has seen a real improvement in its scales, which surged by 8.8X in FY21. Udaan had previously scaled 21X in its revenues, which grew from Rs 46.3 crore in FY19 to become Rs 978 crore in FY20. Β 

Udaan Expenses

Udaan spent Rs 8,742 crore in FY21, which increased by 2.4X from Rs 2,675.2 crore worth of revenue that it saw in FY20. The company spent Rs 1.48 to earn a single rupee of revenue in FY21, which considerably improved by around 60.6% from the Rs 3.76 that it spent in FY20. The annual expenses of Udaan had earlier shot up by 4X from Rs 850 crore in FY19.

Udaan Losses

The Udaan losses were reduced only by 1.4% YOY from Rs 2518.7 crore in FY20 to stay at Rs 2,482.4 crore in FY21. The EBITDA of the company improved considerably though, improving from -226.3% in FY20 to -37.3% in FY21. Udaan had lost Rs 779.6 crore in FY19, which ballooned to Rs 2518.7 crore in FY20, thereby rising by 3.23X.

Udaan FInancials FY19-FY21

Let's dive into some of the growth highlights of the company:

  • It operates as a market leader in the B2B eCommerce marketplace
  • Udaan is one of the fastest companies to scale to a unicorn, which has achieved the unicorn valuation back in September 2018
  • It claims to have a network of 3 million+ users
  • Udaan has its presence in over 900 cities
  • The company connects its 3 million users to over 25,000 sellers across the country.
  • It has raised around $1.4 billion to date and is backed up by heavyweight investors like DST Global, GGV Capital, Lightspeed, Altimeter Capital and Tencent

Udaan - Partnerships

The company collaborated with Danish sportstyle brand, Hummel for pan-India distribution partnership on January 18, 2021.

Udaan has tied up with more than 2500 brands amidst the coronavirus pandemic, one-fourth of which onboarded the platform as Udaan partners.

Udaan - Awards and Achievements

Udaan received the FILA Outstanding Startup of the Year award by Forbes in 2019.

Udaan - Future Plans

The company is aiming towards using fresh capital to expand its supply chain network in India and also focus more on growing the marketplace in both new and existing categories. The founder trio believes that they are building a better platform for small businesses in India. They are also aiming towards generating more revenue and cutting down on their losses, which are still reported to be around Rs 3,009.5 crore outstanding.

FAQs

What is Udaan?

Udaan is a market leader in the B2B eCommerce segment. Founded in 2016 in Bengaluru, Udaan brings manufacturers, traders, retailers, and wholesalers into a single platform.

Who are the founders of Udaan?

Amod Malviya, Sujeet Kumar, and Vaibhav Gupta founded Udaan.

Who is the CEO of Udaan?

Vaibhav Gupta has been announced as the CEO of Udaan in September 2021. The company further declared that the other co-founders Sujeet Kumar and Amod Malviya would work with him as board members to help Udaan transition to a CEO-led structure, which is eyeing an IPO within the next 18-24 months.

Is Udaan a B2B trading platform in India?

Yes, Udaan is a B2B trading platform in India. The Bengaluru-based B2B ecommerce unicorn is designed to bring manufacturers, traders, wholesalers, and retailers under the same platform.

Is Udaan unicorn?

Yes, Udaan is a unicorn company in India, which is also hailed as the fastest tech startup to receive the unicorn status. Udaan achieved this feat when it raised $225 mn in funding in September 2018.

What are some of the Udaan company products?

Udaan makes a wide range of products available to all, which includes rice and rice products, salt, spices, masala, pulses and grains, dry fruits, along with products from several other categories including electronics and appliances, medicines, home and kitchen appliances, hardware supplies, luggage, backpacks and more.

Who are the Udaan competitors in India?

Udaan competitors in India are:

Who are Udaan investors? Β 

Some of the prominent Udaan investors are Blacksoil, Microsoft, DST Global, Lightspeed Venture Partners and more. Β 

How is Udaan funding?

Udaan funding has been overwhelming indeed. The B2B ecommerce unicorn has received around $1.5 bn in funding to date.

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