The raise was a mix of convertible notes and debt.

An internal email sent by Aditya Pandey, the CFO of Indian business-to-business e-commerce major Udaan revealed that the startup has raised $120 million in convertible notes and debt led by existing shareholders and bondholders.

The company has therefore raised $350 million in convertible notes and debt in the past year. Fintrackr says Udaan raised around $1.4 billion and was valued at $3 billion as of January 2021. (Entrackr)

“This fund raise reflects the confidence of investors in our business model and their endorsement of the journey to unit economics, driven by great progress in evolution of our business model and cost efficiency, that we initiated last year,” said the email.

Udaan provides procurement, logistics and working capital to small and medium merchants across India. It claims to have a network of over 3 million retailers, chemists, kirana shops with a supplier base of 30,000 sellers which covers 1200 cities and towns in India.

The startup is targeting to be IPO-ready within the next 12-18 months.

Udaan achievements

In the email, Pandey related some of the notable milestones achieved by the company:

• Unit economics has improved by ~1,000 bps
• Equally strong improvements in both gross margins and operating costs
• The right business design and unit economics has translated into a 60%+ reduction in burn.
• Monthly buyer repeat rates have increased by 500+bps in the last two quarters

“With your support, we will continue to invest to build udaan as a professionally run organisation with scale, capabilities and resilience that can leverage the huge opportunity that Kirana commerce offers, while empowering the small businesses of Bharat,” the email said.

Related Story: Indian B2B Startup udaan Raises $280M Including From Tencent