Udaan, an online supplier to retailers, has raised $280 million from existing and new backers to tap increased e-commerce demand as small businesses go digital during the pandemic.
The investment is an extension of the previous round that the company had raised last year from Tencent holdings and others, according to its media statement. The fresh capital infusion saw existing investors such as Lightspeed Venture Partners, DST Global, GGV Capital, Altimeter Capital, and Tencent putting in money.
San Francisco-based private equity firm Octahedron Capital and U.K.-based Moonstone Capital participated in the round as new investors, the company said. Fresh financing will be used in expanding the B2B e-commerce market, and reach out to more small businesses.
Udaan, a marketplace that caters to retailers, is one of the fastest to turn into a unicorn among Indian startups. The funding comes as businesses have been forced to opt for selling online during the pandemic. And it's expected to accelerate growth of India's digital economy that the government expects to be worth $1 trillion by 2025.
Part of the fresh investment in Udaan will also be used in expansion of products and categories available on the platform, financing capabilities and strengthening the supply chain, the company said.
“Covid-19 has accelerated the already fast digital-led evolution of highly fragmented and unorganised Indian trade/retail industry,” Amod Malviya, co-founder of Udaan, said in the statement. The financing will enable the firm to further take e-commerce to the depth and breadth of the country, "with Udaan's unique low-cost model for core middle India".
Founded nearly four years ago by three former Flipkart executives, the startup sources directly from small manufacturers, farmers and supply it to neighborhood stores, offices, restaurants and even street vendors. Udaan counts wholesale business of Amazon, Walmart, and Reliance Retail Ltd., among others, as its competitors.
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