Business-to-business (B2B) marketplace Udaan, backed by investors such as Lightspeed India Partners and GGV Capital, has raised around $35-40 million in debt from growth-stage debt financing platform EvolutionX Debt Capital, a source familiar with the matter told DealStreetAsia.
This comes a month after Udaan secured $120 million in convertible notes and debt, bringing the total funds raised by Udaan in the last four quarters to over $400 million.
Following the previous fundraising, its CFO Aditya Pande had told employees in an internal mail that the company aimed to make its public market debut over the next 12-18 months.
Udaan, established in 2016 by former Flipkart employees Amod Malviya, Sujeet Kumar, and Vaibhav Gupta, enables traders, wholesalers, retailers, and manufacturers to come together on a platform to find clients, suppliers, and products across categories.
It also counts Microsoft, Nomura, Samena Capital, DST Global, GGV Capital, Altimeter Capital, and Tencent among its investors.
“The efficiency enhancement and structural cost-optimisation initiatives that we undertook last year have already started showing results. Post achieving the milestone of positive unit economics in the previous quarter, we have witnessed robust growth in business during the last two consecutive quarters,” said Vaibhav Gupta, Co-founder & CEO, Udaan.
Founded by DBS and Temasek, EvolutionX provides debt financing to growth-stage, technology-enabled companies across Asia, with a focus on India, China, and Southeast Asia.
EvolutionX’s investment, alongside Udaan’s recent capital raise, will improve the company’s financial strength as well as continue to drive its operational efficiencies with an enhanced focus on achieving profitable growth.
Its investment into Udaan is the second investment in India committed by EvolutionX since the platform’s launch and entry into the Asian growth debt space in late-2021. It recently made its first deal from its $500-million fund in API Holdings, India’s largest digital healthcare platform. API Holdings owns and powers Pharmeasy, which serves over 6 million transacting users, 150,000 active pharmacies, and 1,800 hospitals in India.
In an interview with DealStreetAsia earlier this month, Shah said EvolutionX expects to do more deals in India next year as demand for debt financing continues to rise.
As the access to equity slows down during the funding winter and valuation multiples sober up, Indian startups are increasingly turning to venture debt to meet their working capital needs. Capital investments in the form of debt infusion in Indian startups touched $1.7 billion in Jan-Oct 2022, recording a growth of about 24% over the corresponding period last year, show proprietary data compiled by DealStreetAsia.
“While venture debt has become a growing asset class in India, there is a clear gap in the growth debt space with EvolutionX emerging as a leading player to bridge this gap and has already committed approximately $85 million (Rs 680 crore) in this quarter to category-leading technology companies led by promising founders and reputed investors,” Rahul Shah, partner and co-head leading investments across India and Southeast Asia for EvolutionX, said in a statement.