Udaan announces $160 million structured financing; BlackRock likely to invest $45 million

Bengaluru: B2B e-commerce platform Udaan is set to raise about USD 160 million through a combination of fresh equity, new debt and debt-to-equity conversion, in a move aimed at strengthening its balance sheet and simplifying its capital structure.

As part of the proposed financing, existing shareholders Lightspeed Venture Partners and M&G along with a new investor will infuse fresh equity into the company, while certain existing convertible bondholders will convert a portion of their outstanding debt into equity. The remaining outstanding convertible bonds will be extended on revised terms and conditions.

The company did not disclose the identity of the new debt investor. However, people familiar with the matter said that global asset management firm BlackRock is expected to commit around USD 45 million through its private credit platform as part of the transaction.

The development comes even as some of Udaan's global creditors have initiated insolvency proceedings against Trustroot Internet, the company's Singapore-based holding entity, after it defaulted on USD 170 million of compulsory convertible notes (CCNs) that matured on June 30.

The company in its press note highlighted a sharp improvement in its operating performance over the past 10 quarters.

Between the fourth quarter of calendar year 2023 and the first quarter of calendar year 2026, Udaan said it delivered a revenue CAGR of around 25 per cent, improved contribution margins by nearly 500 basis points, and reduced EBITDA burn by about 70 per cent. The company added that its largest operating cities and clusters are now EBITDA profitable, underscoring the progress of its cluster-led operating model.

Udaan has also expanded its higher-margin private label portfolio, which now contributes 15–25 per cent of staples sales across its operating cities, helping improve operating leverage and the quality of earnings.

"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 CEO, Udaan.

"The continued support from our existing investors, alongside the participation of new capital partners, reflects strong conviction in our business fundamentals and long-term opportunity. 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," Gupta said.

"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, MD, Kotak Mahindra Capital Company, which advised on the transaction.