B2B commerce platform Udaan on Monday announced a proposed financing transaction of about $160 million, a recapitalisation that settles the default on which its Singapore holding company was dragged into insolvency proceedings last month, bringing the case to a close, people aware of the matter said.
The transaction comprises fresh equity, new debt and a conversion of convertible bonds into equity. Existing investors including Lightspeed Venture Partners and M&G Investments, along with other shareholders, are infusing about $50-60 million in fresh equity, while BlackRock is providing about $45 million of new debt through its private credit platform, people aware of the matter said.
The remaining portion of the transaction involves certain existing bondholders converting part of their holdings into equity, while the balance will be extended on revised terms.
The fresh equity and debt together amount to roughly $95-105 million of new capital entering the business, with the balance comprising debt being converted into equity, according to people aware of the matter.
The transaction values Udaan at about $1.6-1.7 billion, sources said, marginally below the $1.8-billion post-money valuation at which it last raised, in a $39-million Series G extension in June 2025, according to Tracxn. Udaan has raised about $1.96 billion in equity across 10 rounds since its inception in 2016, and had attained a peak valuation of $3.2 billion in April 2021, at the height of the funding boom.
Global creditors had moved the Singapore High Court with a winding-up petition against Trustroot Internet, Udaan’s overseas holding entity, after it defaulted on $170 million of compulsorily convertible notes that matured on June 30. Those notes are now being converted and extended under the recapitalisation. Udaan had maintained the proceedings were limited to the offshore holding company with no bearing on its India operations.
The settlement removes the single biggest overhang on a proposed India listing.
“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,” Vaibhav Gupta, co-founder and CEO, Udaan, said. The transaction is subject to customary closing conditions, documentation and regulatory approvals, the company said.
Rajat Ranjan, managing director at Kotak Mahindra Capital Company, said in the company’s statement that the deal creates a cleaner, more deleveraged balance sheet and brings together a long-term investor base, adding that public markets reward businesses that compound sustainably.
On operating performance, Udaan said revenue grew at a compound annual rate of about 25% over the 10 quarters from Q4 CY23 to Q1 CY26, while contribution margin improved by nearly 500 basis points and Ebitda burn fell by around 70%. Bengaluru, its largest operating city, has turned Ebitda positive, and the private label portfolio now accounts for 15-25% of staples sales across operating cities, the company said. The company is estimated to have accumulated losses of around Rs 13,000 crore since inception.
Founded in 2016 by former Flipkart executives Vaibhav Gupta, Sujeet Kumar and Amod Malviya, Udaan operates across FMCG, staples, fruits and vegetables and pharma, and runs a working capital lending arm, udaanCapital. It counts Lightspeed Venture Partners, DST Global and Tencent among its backers.
