Udaan, on whose B2B platform traders, wholesalers, retailers and manufacturers do business, has raised a fresh $280 million from a clutch of investors as part of its Series D round.
Udaan’s marketplace enables nearly two million shopkeepers, kiranas, restaurants, chemists, street vendors and offices to source supplies from a network of more than 25,000 small manufacturers and farmers.
Udaan, on whose B2B platform traders, wholesalers, retailers and manufacturers do business, has raised a fresh $280 million from a clutch of investors as part of its Series D round. The investment values the e-commerce firm at over $3 billion, said persons aware of the discussions, topping the $2.8 billion which it commanded post the last fund-raise of a chunky $585 million in October 2019.
New investors Octahedron Capital and Moonstone Capital joined this round which also saw participation from existing backers Lightspeed Venture Partners, DST Global, GGV Capital, Altimeter Capital and Tencent, the company said in a statement on Wednesday. Udaan has now raised $1.15 billion in all.
Consultants expect the B2B piece of e-grocery and FMCG market to see a lot of action this year as players leverage the 12 million kiranas to grow their presence. Grocery is tipped to be the fastest growing e-commerce category over the next 5-10 years. Citing industry discussions, Kotak Institutional Equities wrote recently the Indian online grocery delivery segment clocked $2.0-2.5 billion of gross merchandise value in FY20. This implies a minuscule 0.3-0.4% share of online grocery in the overall food and grocery pie.
KIE believes grocery e-tail can grow at a healthy compounded annual growth rate of 25-50% for the next few years. Assuming a 50% CAGR during FY20-25, it pegs the size of grocery e-tail market at $23 billion by FY25.
Udaan’s marketplace enables nearly two million shopkeepers, kiranas, restaurants, chemists, street vendors and offices to source supplies from a network of more than 25,000 small manufacturers and farmers. The platform that sells everyday items ranging from perishables and packaged foods to apparel and electronics claims it has three million users (including the 25,000 sellers) across 900 cities.
“The B2B e-commerce space will be a lot more in focus in 2021 with many of the mom-and–pop stores being transformed as the larger marketplaces work to upgrade them,” Harsha Razdan, partner & head (consumer markets and internet), KPMG India, said. “The opportunity (of the B2B market) is driven by the growing need to have a ‘kosher’ supply chain which is not marred by middlemen who create barriers which cause stress on the retail journey of a kirana store owner and end user – the customer, analysts at RedSeer had observed recently.
The space has players like Flipkart, Amazon and JioMart as also Jumbotail, ShopX and Udaan. The vertical players include BigBasket and Grofers. Flipkart Wholesale launched earlier last year is already catering to fashion retailers in select cities and has lately expanded to grocery. JioMart fulfills orders placed by kiranas by sourcing products from their distribution centres and network of stores. The five-year old Jumbotail that services over 30,000 kiranas is now helping them digitise their stores and facilitating conversion into modern convenience grocery outlets.