Lightspeed Venture Partners-backed business-to-business (B2B) e-commerce startup Udaan has raised $120 million in debt convertible to equity, led by its existing financiers, chief financial officer Aditya Pande said in an internal email to employees.
With this round, the total funds raised by Udaan through convertible notes and debt in the last four quarters have crossed $350 million, making it one of the largest structured instrument fundraises in the country, Pande said in the email.
Moneycontrol has seen the copy of the mail. Its existing financiers include tech giant Microsoft. However, the names of the investors were not disclosed in the note.
The Bengaluru-based company founded in 2016 by Amod Malviya, Vaibhav Gupta, and Sujeet Kumar had been struggling to raise funds due to the tough funding environment. The firm had been opting for the debt-convertible equity round for the past two fundraisers.
Udaan recently raised $200 million in debt convertible equity. This is significant for the B2B major as the investors will have the option to convert the debt notes to equity before the company hits the public markets.
“Despite the funding-related challenges being experienced by the larger start-up ecosystem, this fundraising 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,” Pandey’s statement said.
Udaan said that it is getting ready for an IPO in the next 12-18 months.
“We are getting ready to go public in the next 12-18 months…Our unit economics improved by ~ 1000bps with equally strong improvements in both gross margins and operating cost and the journey of the right business design & unit economics has translated into a 60%+ reduction in the burn,” Pandey added in the email.