Udaan, [https://crunchbase.com/organization/udaan]a three-year-old
business-to-business e-commerce platform in India, has raised more than half a
billion dollars in a new financing round as it looks to bring more kirana stores
(neighborhood stores), chemists and other small businesses online through its
marketplace.

The startup said today it has raised $585 million in a Series D round from
Tencent, Altimeter, Footpath Ventures, Hillhouse,GGV Capital
[https://crunchbase.com/organization/ggv-capital]and Citi Ventures. Existing
investors Lightspeed Venture Partners, which wrote its first check to the
startup back in 2016, and DST Global also invested in the round.

The new round ? the largest for any B2B e-commerce platform in India ? valued
the startup between $2.3 billion and $2.7 billion, a person familiar with the
matter told TechCrunch. Co-founders of Udaan, which reached the unicorn status
in the shortest period of time among Indian startups, declined to comment on the
valuation.

Udaan operates an eponymous B2B marketplace that connects small retailers with
wholesalers and traders.?The platform supports a wide-range of categories from
lifestyle, electronics, home and kitchen, staples and toys, to fruits and
vegetables.

Udaan also offers a credit line to provide working capital to buyers and sellers
on its platform, thereby addressing one of the biggest challenges faced by small
and micro businesses and merchants in the nation, said Vaibhav Gupta, a
co-founder of Udaan, in an interview with TechCrunch. The credit to buyers and
sellers is financed by Udaan and other non-banking partners, he said.

The startup has amassed more than 3 million retailers and more than 25,000
sellers from 900 cities and towns in India. The startup?processed five million
orders in the month of August.

Today, a wide range of merchants, including farmers, shopkeeper owners,
restaurants, chemists and street vendors are connected to Udaan. The startup has
set up a supply chain network throughout the nation to fulfill more than half of
the orders on its platform.

From left-to-right: Amod-Malviya, Vaibhav Gupta and Sujeet Kumar, co-founders of
Udaan

Sujeet Kumar, another co-founder of Udaan, said the startup will use the fresh
capital to expand its supply chain network in the nation and focus on growing
the marketplace in both existing and new categories. The startup will also look
to scale UdaanCapital, its credit line business.

Even as more than half a billion people in India are online today, most
businesses in the nation remain offline. But a growingcohort of startups
[https://techcrunch.com/2019/09/30/khatabook-seriesa-businesses-bookkeeping-payments/] in the nation is beginning to help merchants make use of technology.

Amazon [https://crunchbase.com/organization/amazon]and Walmart have invested
billions of dollars to create business-to-commerce marketplaces in India, but
e-commerce still accounts for just 3% of the overall retail market in the
country.

Their mightiest rivals remain mom and pop stores that dot tens of thousands of
villages, cities, towns and slums of India. In recent years, many Silicon Valley
companies have also started to address these businesses.Google
[https://crunchbase.com/organization/google]has launched tools to help these mom
and pop stores set up their online presence, and, last month, it launched a
business app of Google Pay
[https://techcrunch.com/2019/09/18/google-pay-job-business-india/]to help these
merchants accept online payments.

That?s the opportunity that drove Vaibhav, Sujeet and Amod Malviya ? the third
co-founder ? toleave their jobs at e-commerce platform Flipkart
[https://techcrunch.com/2018/09/03/udaan-the-e-commerce-startup-led-by-three-former-flipkart-executives-has-raised-225m/] and build a platform to serve small businesses in the nation.

?The market opportunity is turning out to be much deeper than we envisioned when
Lightspeed led the company?s Series A financing in 2016 and we?re excited to
continue supporting the company while welcoming a strong syndicate of new
investors,? said Bejul Somaia, a partner atLightspeed Venture Partners
[https://crunchbase.com/organization/lightspeed-venture-partners].

In a statement, Martin Lau, president of Tencent, said, ?Udaan?s unique approach
can enhance the capabilities of millions of retail stores across India. It
represents a powerful example of how technology can empower the business of
small merchants, improve the efficiency of industries and bring benefits to
consumers.?

As Udaan scales its business, the startup will explore ways to generate more
revenue, Gupta said. ?We have barely scratched the surface, so our focus largely
has been to bring more businesses onto the platform and build products and
services to serve their needs. That said, monetization is something that we are
looking at as our business grows. We are taking calculated measures to generate
revenue from the aspect of our business that is maturing,? he added.

Udaan, which in recent quarters has introduced features such as support for
government-backed UPI payments platform and an easy tax invoicing tool, expects
to clock about $2 billion in annual GMV this year.