Udaan experiences a downturn, resulting in its valuation decreasing to $1.8 billion.

Udaan, a B2B e-commerce company, has undergone a significant devaluation, plummeting to approximately $1.8 billion in a downturn – one of the most substantial declines for a startup previously valued at over $1 billion.

Previously valued at $3.2 billion after a fundraising round in January 2021, Udaan, based in Bengaluru and operated by Trustroot Internet, recorded a 43% decrease in total sales to Rs. 5,629 crores for the fiscal year ending March 2023. Simultaneously, losses were reduced to Rs. 2,075 crore from Rs. 3,123 crore in FY ’22.

In December 2023, Udaan underwent a $340 million transaction, converting a significant portion of its debt notes into stock, along with a fresh equity injection. Major backers include China’s Tencent and DST Global.

To navigate towards profitability, Udaan has been strategically reducing operations over the past 12-18 months, resulting in a reduction in workforce from a peak of over 5,000 to 1,500 employees. CEO Vaibhav Gupta emphasized the team’s commitment to cost-saving measures each quarter. Sources indicate that Udaan has communicated specific operational goals to investors, aiming for profitability in the next two quarters.

As part of its strategy, the e-commerce firm has adjusted its shipping approach, opting for local networks over a national one to further minimize operational costs. Udaan shifted to local networks due to the higher expenses associated with national transportation.

Founded in 2016 by Vaibhav Gupta, Sujeet Kumar, and Amod Malviya (former Flipkart colleagues), Udaan’s platform facilitates transactions among small merchants, wholesalers, and retailers. Additionally, it operates a loan division through its non-banking financial arms. Notably, Malviya and Kumar have been absent from the company’s activities for nearly two years.

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