Udaan, an emerging player in India’s e-commerce sector, is preparing for its much-anticipated 2025 IPO. In the face of fierce competition from industry giants like Reliance Industries and Walmart’s Flipkart, CEO Vaibhav Gupta is spearheading a strategy focused on cost reduction and partnering with consumer brands. The primary goal is to achieve consistent financial performance and profitability within the next 18 months.
Udaan, supported by Lightspeed Venture Partners, stands among a wave of startups capitalizing on India’s thriving economy and consumer market, while investor pressure for profitability mounts. In the wake of challenges faced by fellow Indian startup Byju’s, CEO Gupta emphasizes the importance of professional management, a structured board, and institutionalized shareholders as they move toward the public market. The company is yet to decide on a listing location, as its valuation surpassed $3 billion in a 2021 funding round, with discussions in September about raising $400 million. Lightspeed owns around 35% of Udaan’s equity, and Tencent Holdings holds a 6% stake.
Udaan’s journey began in 2016, initiated by three former Flipkart engineers. In 2021, Vaibhav Gupta, one of the founders, assumed the role of CEO, with Amod Malviya and Sujeet Kumar serving as board members. The company’s triumph is rooted in its online marketplace and logistics networks, streamlining the delivery process for smaller retailers while cutting out traditional intermediaries. Even though online wholesale trade is just a small part of India’s retail scene right now, McKinsey & Co. believes it could grow to $150 billion in sales.
Beyond e-commerce, Udaan has ventured into the realm of financing through its fintech unit, helping shopkeepers secure working capital loans to purchase inventory. This financing arm is profitable and boasts an impressive annual growth rate of 70%.
