B2B e-commerce platform Udaan has raised $200 million through a convertible note financing round, which was oversubscribed 2x.

Five new investors have participated in this financing round along with Udaan’s existing investors including the ones who bought into the company through a secondary (ESOP) round in H1 2021, according to an internal email sent by the company CFO Aditya Pande. BusinessLine has reviewed a copy of this email.

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“This reflects our ‘broadening the capitalisation strategy’ as we architect our journey for public markets and thereafter. With this convertible offering, we, as a company, have started building a complete new muscle in our finance function — which we will continue to strengthen as we go forward,” Pande wrote in the email.

An Udaan spokesperson declined to comment on this development.

Multiple funding rounds

The convertible note is an instrument typically used by companies at the pre-IPO stage and the instrument converts into equity at the IPO. Other tech companies like Airbnb, Uber, Spotify have also used convertible notes. At the time of appointing Vaibhav Gupta as the company CEO in September 2021, Udaan announced plans to go public in 18-24 months.

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Prior to this $200-million round, the company raised another $50 million through debt in the last quarter of 2021. Overall, Udaan has raised $1.4 billion across multiple funding rounds till now.

Founded in 2016 with a vision to transform the trade ecosystem and empower small businesses by leveraging technology, Udaan has operations across categories including lifestyle, electronics, home & kitchen, staples, fruits & vegetables, FMCG, pharma, toys and general merchandise. The company claims to have over 3 million users, 1.7 million retailers and 30,000 sellers on the platform across the country.

It enables supply chain and logistics operations, focused on B2B trade and built on strong technology, for daily delivery across over 900 cities and more than 12,000 pin codes through udaanExpress. The company also offers financial products and services to small businesses, manufacturers, and retailers through udaanCapital to grow their business. Udaan recently also entered the community buying space with the launch of Price Company.