India: B2B marketplace Udaan raises $10m from Lightspeed

Udaan.com, a business-to-business online marketplace, on Tuesday said it has raised $10 million in series A funding from venture capital firm Lightspeed Venture Partners India and Lightspeed US.

Udaan was launched earlier this year by Sujeet Kumar, Vaibhav Gupta and Amod Malviya, former senior executives at Flipkart, India’s most valuable e-commerce firm. At Flipkart, Kumar was logistics head, Malviya was chief technology officer and Gupta was business finance chief.

Udaan is currently running a pilot connecting manufacturers, wholesalers, traders and retailers. It has two categories so far—mobile accessories and fashion products.

“It’s very rare to have an opportunity to back an experienced team of founders like Sujeet, Amod and Vaibhav, who have worked together for several years at Flipkart and we are excited to be partnering with them,” Lightspeed India managing director Bejul Somaia said in a statement.

Udaan expects to be fully operational in the next two months, Kumar said.

India’s B2B e-commerce market potential was valued at $300 billion in 2014, and expected to reach $700 billion by 2020, according to an April report by the Confederation of Indian Industry and Deloitte.

B2B e-commerce is also lucrative, partly because marketplaces do not necessarily have to give heavy discounts to increase transactions.

About 259 start-ups have been founded in this sector since 2015, according to data from Tracxn, a start-up tracker. These firms have raised $103 million in funding so far.

Recognizing the large potential, a number of global e-commerce firms which sell to consumers have stepped up their focus on the B2B commerce space in India. The government has allowed 100% foreign direct investment in B2B e-commerce, which has also helped these firms enter India.

Alibaba Group Holding Ltd, for instance, entered into agreements with new partners in September, including Kotak Mahindra Bank, IDFC Bank, logistics start-up Delhivery, DHL, and Aditya Birla Finance to provide better services to the small businesses on its platform. Since starting in India in 2007, it has over six million registered Indian buyers and sellers.

Globally too, B2B e-commerce business makes up a large part of Alibaba’s revenues. For the fiscal year 2016 (ended 31 March), it reported a 15% increase in revenue to $834.15 million from $725.44 million.

Amazon India, which is one of the top two retail e-commerce sites in the country, also has a wholesale arm, which was set up in 2013, that caters to small offices, departmental stores, kirana stores, drugstores, clinics, hospitals, hotels and restaurants. The service is only available in Karnataka right now.

However, entry barriers in B2B are also high. Firms need to integrate technology, put in place complex logistics fulfilment processes and, most importantly, convince businesses to go online.

The difficulty in cracking the B2B market is reflected in the fact that while India’s consumer Internet business had grown to an annualized $15.2 billion last December, according to RedSeer Consulting, the B2B Internet market is an insignificant number.

Also Read: Sequoia, Lightspeed & Times Internet put $20m in Indian bus aggregator Shuttl

Microsoft ranks Indian B2B start-ups on readiness to work with enterprises

This article was first published on Livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.