E-commerce firm Udaan said it has proposed a financing transaction of about $160 million, combining new equity, fresh debt and the conversion of a portion of its outstanding convertible bonds into equity. Existing shareholders and a new investor will provide fresh equity capital, while certain bondholders will swap part of their holdings for shares. The remaining convertible debt will be extended under revised terms.
Separately, one of the world’s largest investment management firms has committed about $45 million in fresh financing through its private credit platform, bolstering Udaan’s balance sheet and supporting its long-term growth plans.
Udaan did not disclose the identities of the investors. Existing backers, including M&G Prudential and Lightspeed Venture Partners, participated in the financing alongside new investor BlackRock, according to people familiar with the matter.
The transaction would strengthen Udaan’s balance sheet, simplify its capital structure and provide additional financial flexibility as the company pursues its next phase of growth and advances plans for a potential public listing.
“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 (CEO) of Udaan. “Over the last several quarters, we have consistently improved our operating performance by delivering healthy growth while significantly strengthening profitability and cash efficiency. 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.”
The new financing builds on Udaan’s strong business momentum and consistent execution over the last several quarters. Over the 10-quarter period from Q4 CY23 to Q1 CY26, the company delivered approximately 25 per cent CAGR in revenue, improved contribution margins by nearly 500 basis points, and reduced EBITDA burn by around 70 per cent. With its largest operating cities and clusters now EBITDA-profitable, the company continues to demonstrate sustained progress towards profitable growth and the scalability of its cluster-led operating model.
The company has also continued to expand its portfolio of higher-margin businesses, with its private-label portfolio now contributing 15-25 per cent of staples sales across operating cities. This has further strengthened the quality of earnings while improving operating leverage and unit economics.
The proposed transaction remains subject to customary closing conditions, documentation and regulatory approvals, where applicable.
“This transaction is an important milestone in Udaan’s journey. It creates a cleaner, more deleveraged balance sheet, simplifies the capital structure and brings together a strong, long-term investor base,” said Rajat Ranjan, managing director, Kotak Mahindra Capital Company (KMCC). “Public markets reward businesses that compound sustainably, and this transaction provides a strong foundation as the company progresses towards its public market ambitions.”