B2B e-commerce startup Udaan raises $50 million from Lightspeed, Yuri Milner

In a mega investment of early stage India startups, Udaan, a business-to-business e-commerce portal in its second stage has raised around Rs 320 crore or $50 million funding.

The company which has been started by three former top Flipkart employees, Udaan has picked up the huge cheque, especially so keeping in mind the skittish investor sentiments around India tech, from its existing backer Lightspeed Venture Partners and Russian billionaire Yuri Milner who has come on board new in his personal capacity.

Udaan has received a funding of around $30 35 million through its US and India units from Silicon Valley venture fund Lightspeed, that has also invested in companies like ephemeral messaging app Snapchat, The rest of the capital has been put by Milner's personal investment vehicle.

Vaibhav Gupta, Amod Malviya and Sujeet Kumar had left Flipkart in 2016 to start Udaan which wants to create an online marketplace to facilitate the purchase of goods by businesses, wholesalers and traders. Right now operational in categories like clothing, electronics, FMCG and staples, it will expand into other segments. The funds will go into building the entire fulfillment infrastructure like logistics for the online marketplace at a time when the likes of Amazon and Alibaba are starting to push their presence in this segment.

Kumar said Udaan’s looking to reduce the fulfillment costs through technology. “We want to be an open platform like a true marketplace but control the quality and logistics which will speed up deliveries, he told TOI in a chat. The small and medium sized businesses are a big consumer base for Udaan which delivers to 500 cities and executes pick-ups from 80 cities. Udaan is expected to be clocking Rs 100 crore in monthly sales.”

Bejul Somaia, MD at Lightspeed Venture Partners India said they continue to be big believers in the Udaan team and the market opportunity. The company’s early performance across a range of product-market fit and growth metrics are comparable to the best marketplace platforms we’ve seen globally, he said. Lightspeed had first backed Udaan in 2016 when it was still in its idea stage.

A rush of B2B e-marketplaces got funded in 2016, after investor confidence around capital-guzzling, high-burn consumer internet firms had waned considerably. Some of the other funded players in the B2B e-commerce sector include Industry Buying, OfBusiness, Power2SME, Moglix, and mSupply .com, among others.