Udaan raises $160 million in fresh financing to strengthen balance sheet ahead of IPO plans

B2B e-commerce platform Udaan has announced a proposed financing transaction of about $160 million, comprising fresh equity, new debt and debt-to-equity conversion, as the company looks to strengthen its balance sheet and move closer to its long-term public market ambitions.

As part of the transaction, existing shareholders along with a new investor will infuse fresh equity into the company, while certain existing convertible bondholders will convert a portion of their outstanding debt into equity. The remaining balance of the convertible bonds will be extended on revised terms. In addition, one of the world’s leading investment management firms has committed around $45 million through its private credit platform, providing fresh financing to support the company’s next phase of growth.

The Bengaluru-based company said the transaction would simplify its capital structure, improve financial flexibility and materially strengthen its balance sheet, while enhancing its readiness for a future public listing. The deal remains subject to customary closing conditions and regulatory approvals.

The fundraising comes after Udaan reported significant operational improvements over the last 10 quarters. Between the fourth quarter of calendar year 2023 and the first quarter of calendar year 2026, the company said revenue grew at a compound annual growth rate of around 25 per cent, contribution margins improved by nearly 500 basis points, and EBITDA burn reduced by about 70%. Several of its largest operating cities and clusters have already turned EBITDA profitable.

The company has also been expanding its higher-margin private label business, which now contributes 15-25 per cent of staples sales across its operating cities, helping improve earnings quality and operating leverage.

“This financing round marks another milestone in Udaan’s journey towards building a sustainable, profitable and institutionally resilient business,” said Vaibhav Gupta, Co-founder and Chief Executive Officer, Udaan. “With a stronger balance sheet and a simpler capital structure, we are well positioned to continue investing in customer value, deepening our market leadership and progressing towards our long-term public market ambitions.”

Rajat Ranjan, Managing Director at Kotak Mahindra Capital Company, said the transaction creates a cleaner, more deleveraged balance sheet and provides a strong foundation as the company advances towards its public market ambitions.