Indian B2B e-commerce startup Udaan raises $280 million – TechCrunch

Business-to-business market The flight Has raised $ 280 million from new and existing investors as Indian startups build a battle-chest to accelerate their growth and deter rivals.

The new capital is not part of a new financing round, but Series D. Bangalore-based startup is expanding Secured $ 585 million before new capital As part of its Series D round and ranging in total from $ 1.15 billion to date, it is valued at over $ 3.1 billion, familiar to the case reported to TechCrunch.

Octahedron Capital and Moonstone Capital are financing new capital, with participation from existing investors speed of light Venture Partners, DST Global, GGV Capital, Altimeter Capital and Tencent.

Most of the business-to-business in India is unorganized. This means that merchants of the nation today have to travel to other cities – where all major dealers work to stock their inventory. But these merchants do not have the benefit of much interaction, so they struggle to find the best value for money and access to a wider selection of catalogs.

The flightCo-founded by three former Flipkart executives, is solving this problem by connecting small retailers to wholesalers and merchants. The startup today serves more than 3 million retailers and small and medium-sized businesses and includes thousands of brands including Coca Cola, PepsiCo, Boat Lifestyle, Micromax, HP, LG, ITC, HUL, and P&G.

Udayan co-founder Amod Malviya said in a statement that the coronovirus epidemic underscored the importance of small businesses and mom-and-pop shops (known as kirans) in the country.

“Rising as India’s largest e-commerce platform over the past 4 years, India’s rise as the first e-commerce platform is at the forefront of this unique Indian e-commerce opportunity. This funding enables us to pursue our journey of taking e-commerce to the depth and breadth of the country, with UDAN’s unique low-cost model for core central India, ”he said.

In addition to the inventory problem, UDAN also helps merchants secure working capital. Small businesses, especially mom-and-pop shops, rely on the money they secure their current inventory from purchasing the next batch. As Udaya is able to see the engagement of various traders on the platform, it is able to provide them further working capital in time.

These decades-old challenges also present a massive potential reward for firms. “Demand for unheard SME loans in India is ~ US $ 300– $ 350 billion, with more than 90% of current demand being met by banks. Bank of America analysts recently wrote in an Equity Research report that a typical at Rs.5-5 million ($ 13,575 to $ 67,875) with no collateral, average tenure ~ 12-18 months, and some ecosystem anchor. The digital SME lender focuses. Received by TechCrunch.

“While in theory the growth potential is high, in spite of very high yields, we do not find their economy better than banks even in stable condition. Overall, steady state ROE (return on equity) is unlikely to exceed the 18% level for an average digital SME lender – not significantly higher than a large private bank, ”he wrote.

Udaan said it would deploy new capital to further the market and increase the selection of products and categories currently offered. In addition, the four-year-old startup said it would expand its financing capabilities for small businesses and its supply chain network.

Malaviya said that the fresh fund “reflects the long-term transformative and fundamental value creation potential that provides an incubation platform for the lives and businesses of Indian MSMEs, who are major employment creators and the backbone of our economy and society.” “The participation of existing and new investors in this funding highlights the growing recognition of capital markets and the opportunity offered by this unique nature of the Indian market.

In the last two years, scores of startups and giants like Reliance and Amazon have started to explore business-to-business markets in India. Reliance Retail is the largest retail chain in India, where it serves more than 3.5 million customers each week through nearly 10,000 physical stores in more than 6,500 cities and towns across the country.

retail chains Entered the e-commerce space with JioMart In late 2019 through a joint venture with Jio platforms. By the middle of last year, JioMart was Registered presence in more than 200 Indian cities and towns. On top of this, Reliance Retail has a Partnering with Facebook for WhatsApp integration. Facebook, Which which Jio invested $ 5.7 billion in platforms earlier this yearHas stated that it will explore different ways of working with Reliance to digitize the country’s mom and pop stores, as well as other small and medium-sized businesses.

For JioMart, Reliance Retail is working with retail outlets, giving them a digital point of sale machine to accept money electronically. It is also allowing these stores to buy their inventory from Reliance Retail and then use their physical presence as delivery points. It is currently largely focused on grocery delivery. In a recent report to customers, Goldman Sachs analysts speculated that Reliance could become the largest player in online grocery within three years.