Udaan lands $50M in Series-B funding from LightSpeed & Yuri Milner's Apoletto

Business-to-business (B2B) e-commerce platform Udaan has raised $50 million in Series-B financing led by Lightspeed Venture Partners, Lightspeed India and DST Global founder Yuri Milner's personal investment vehicle Apoletto, making it one of the biggest funding rounds at an early stage in the Indian startup ecosystem.
 
Ravi Mhatre from Lightspeed Venture Partners and Bejul Somaia from Lightspeed India have been involved in the transaction with the latter also being part Udaan's board.
 
The company will use the newly-infused funds to expand their team, ramp up technological infrastructure, expand their offerings and extend their footprint. Udaan was founded in 2016 by former Flipkart executives Vaibhav Gupta, Amod Malviya and Sujeet Kumar.
 
"B2B e-commerce is a big market opportunity with 500 million SMEs doing annual trade worth of $600-800 billion," said co-founder, Kumar. "Inefficiencies need to be solved in the areas of distribution, sales, marketing, among others."
 
During his time at Flipkart, Kumar was a senior operations executive who ran the logistics unit Ekart and WS Retail, then the main seller on the marketplace. Gupta had led functions like product management and finance during his stint at the online retailer, while Malviya was the chief technology officer. All three left Flipkart in 2016 to set up Udaan.
The company claims to have grown "tremendously" since its formal launch in June 2017 with a seven-time monthly repeat rate of purchase and more than 40% conversion rate. Udaan currently operates in apparel, electronics and staples/FMCG, picking up products from manufacturers and sellers in 80 cities and delivering across 500 cities. Kumar said 15-20% of the sellers' overall business is on the Udaan platform.
 
Udaan's team, which comprised around 20 people during its last fundraise of $10 million in November 2016, has now grown to over 150 members, with more additions expected.
 
"Udaan's product-market fit and growth dynamics are comparable to the best marketplace platforms we've seen globally," said Somaia on why Lightspeed doubled on the investment. Lightspeed has invested in companies like Snap, Stitchfix, and The Honest Company.
 
Companies in the B2B e-commerce space have been garnering a lot of investors attention and received nearly $200 million across 22 funding rounds in 2017, as per Tracxn data.
 
That compares with about $115 million invested in B2B e-commerce startups across 40 funding rounds in 2016, and about $30 million invested across 26 rounds in the year before. Other companies in this space include Nandan Nilekani-backed ShopX, Kalaari Capital-backed Jumbotail, and Matrix Partners-backed OfBusiness.
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