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Udaan: Empowering Small Businesses and Shaping India’s B2B Landscape

Udaan, a prominent Business-to-Business (B2B) e-commerce platform, is making waves in the Indian business landscape. With a mission to facilitate business growth through technology, Udaan has established itself as one of the country’s largest national distribution platforms and achieved unicorn status by securing $225 million in 2018. 

Its primary objective is to simplify the business landscape in India, granting users access to new markets and offering financial products to both sellers and buyers. 

Udaan aspires to unite traders, manufacturers, wholesalers, and retailers under a single, comprehensive platform, revolutionizing the way business is conducted in the country.

The inception

In the words of Udaan’s Co-founder, Sujeet Kumar, “Almost 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.” 

Founded by ex-Flipkart employees, Udaan’s journey began with a mission to empower India’s small and medium-scale businesses. 

Initially, the platform focused on logistics services for small buyers and sellers in the electronics sector, a strategic decision that quickly garnered attention within the country’s startup landscape. Building a robust database was the initial priority, paving the way for their future supply business endeavors. Today, Udaan is not only a thriving B2B trading platform but also has its sights set on evolving into a lending platform for merchants, further enhancing its support for India’s small businesses.

Challenges faced

Udaan faced the challenge of determining the right product-market mix in its journey as a B2B marketplace and persuading traditional retailers and wholesalers to transition to an online platform. 

Establishing a robust supply chain network also posed a significant hurdle. In 2022, the company initiated layoffs, affecting around 180 employees with potential for further layoffs. 

Additionally, Udaan filed an antitrust case against Parle Products, alleging market dominance abuse related to the supply of Parle-G biscuits, which was subsequently rejected by the Competition Commission of India. Parle responded by critiquing Udaan’s business model, expressing concerns about its financial stability and accumulating debt.

The investors

Key investors in Udaan’s funding rounds include EvolutionX, Microsoft, M&G Prudential, Kaiser Permanente, Nomura, TOR, Arena Investors, Samena Capital, Ishana Capital, Corsa Ventures, VBG Group, Walton Street India, Blacksoil, InnoVen Capital, BlackSoil Capital, DST Global, Octahedron Capital, Lightspeed Ventures, Altimeter Capital, Citi Ventures, Footpath Ventures, Hillhouse Capital Group, Tencent Holdings, and Lightspeed Venture Partners.

Their growth

Udaan has experienced substantial growth, emerging as a market leader in the B2B eCommerce marketplace. 

It quickly achieved unicorn status in September 2018 and currently boasts a vast network of over 3 million users connected to more than 25,000 sellers across the country. Operating in 900+ cities, the company offers a wide range of products, with more than 5 lakh listed on its platform. 

Udaan has raised an impressive $1.6 billion to date, with support from heavyweight investors like DST Global, GGV Capital, Lightspeed, Altimeter Capital, and Tencent. Its extensive supply chain network enables it to fulfill over half of the orders on its platform, making it a cornerstone in India’s B2B landscape

Future plans

Udaan’s future plans involve using new capital to further expand its supply chain network across India and concentrate on marketplace growth in both new and existing categories. The company’s founders are dedicated to building a robust platform that benefits small businesses in India. Additionally, Udaan has expressed intentions to go public within the next 12-18 months, as reported in November 2022, marking a significant step in its journey.

Read more: Instamojo: Fueling Fintech Innovation and Empowering Indian SMEs

Snigdha Basu
Snigdha Basu
A multifaceted writer, Snigdha Basu is a freelancer and a columnist at Entrepreneurs Today. She also spearheads Chic Life Edition - her own Digital Magazine with sustainable fashion, beauty, and culture at its core. Reach out to Snigdha at [email protected] for inquiries.
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