India B2B eCommerce Firm Udaan Lands $585M

One of the largest B2B eCommerce platforms in India, Udaan, has raised $585 million in a Series D funding round. The company wants to help chemists, kirana (family-owned) stores and other businesses to come online with its platform, according to reports.

Tencent, Altimeter, Footpath Ventures, Hillhouse, GGV Capital and Citi Ventures all participated in the round. Previous investors Lightspeed Venture Partners and DST Global also invested. The company is about three years old, and reached unicorn status faster than any other Indian startup previously. It’s valued at between $2.3 billion and $2.7 billion.

“Udaan’s unique approach can enhance the capabilities of millions of retail stores across India,” said Martin Lau, president of Tencent. “It represents a powerful example of how technology can empower the business of small merchants, improve the efficiency of industries and bring benefits to consumers.”

Udaan connects buyers and sellers in categories like electronics, lifestyle, home and kitchen, fruits and vegetables, and toys. It offers credit to both buyers and sellers as well, which is one of the hardest problems facing smaller businesses in the country, according to Co-founder Vaibhav Gupta. The credit doesn’t come from banks, but is financed by Udaan and its partners.

“We have barely scratched the surface, so our focus largely has been to bring more businesses onto the platform, and build products and services to serve their needs,” Gupta said. “That said, monetization is something that we are looking at as our business grows. We are taking calculated measures to generate revenue from the aspect of our business that is maturing.”

Many businesses in the country are not online, even if half a billion people in the country are online. However, many startups in the country are trying to change that.

“The market opportunity is turning out to be much deeper than we envisioned when Lightspeed led the company’s Series A [funding] in 2016, and we’re excited to continue supporting the company while welcoming a strong syndicate of new investors,” said Bejul Somaia, a partner at Lightspeed Venture Partners.