According to a company’s internal note sent by Aditya Pande, Chief Financial Officer at Udaan, the business-to-business (B2B) eCommerce startup has closed a $200 million Debt Financing round through Convertible Notes from five new investors.

According to sources familiar with the matter, Tor Investment, Arena Investors, and M&G Investments are among the latest investors engaged in this round.

The decision to raise debt financing through convertible notes appears to be substantial for Udaan, as they plan to go public in the next 18-24 months. These investors will be able to convert their convertible notes to stock later, possibly before the IPO.

As part of their recently completed convertible note financing, they are excited and pleased to announce the addition of five new premier investors to the Udaan juggernaut. Their existing investors, including some who bought into the corporation through the secondary (Esop) round in H1 2021, participated in this round, which was oversubscribed 2x, Pande wrote in his note.

According to him, the latest funding reflects Udaan’s “broadening the capitalization strategy” as it prepares for its initial public offering. With this convertible offering, they have begun to build an entirely new muscle in their finance function, which they will proceed to solidify as we move forward, stated Pande. He previously served as the CFO at IndiGo.  Businesses like Airbnb, Uber, and Spotify, according to Pande, raised similar debt financing via convertible notes prior to their IPOs.

The Bengaluru-based firm had previously raised $50 million in debt financing. Last year, the management of Udaan underwent a significant change. Vaibhav Gupta, one of the company’s Co-Founders, was named CEO in September. Sujeet Kumar and Amod Malviya, the other two Co-Founders, said in an official statement that they will assist the operation of a CEO-led organization and will continue to influence the business strategy roadmap and investment choices as active members of the board.

According to sources, the Bengaluru-based firm researched an equity fundraise last year and hired Goldman Sachs as its investment banker. However, the company was unable to secure equity financing at the time.

It raised $280 million in January 2020 as part of an extension of its prior funding round of $585 million, valuing it at $3.1 billion. DST Global, Altimeter Capital, GGV Capital, Lightspeed Venture Partners, and Tencent are among the investors who have contributed more than $1 billion to the company.

About Udaan

Udaan is India’s biggest B2B eCommerce platform, enabling small firms through the power and scale offered by eCommerce. It was founded in 2016 with a vision to transform the country’s trade ecosystem through technology. Lifestyle, electronics, home & kitchen, staples, fruits & vegetables, FMCG, pharma, toys, and general merchandise are among the categories it operates. Across the country, udaan has over 3 million users, 1.7 million retailers, chemists, kirana shops, HoReCa, farmers, and 30,000 sellers. 

The post Udaan, a B2B eCommerce Startup, Completes a $200 Million Debt Financing Round Via Convertible Notes appeared first on The Media Bulletin.