B2B marketplace Udaan to raise $35.7 mn from S’pore parent; FY19 losses mount on higher cash burn

Hiveloop Technology, the Bengaluru-based company that owns and operates online B2B ecommerce marketplace Udaan, is raising $35.7 million from its Singapore-based parent Trustroot Internet, as part of an ongoing capita infusion. Out of the total infusion, the company has already raised $10 million.  

The company will issue 2.82 lakh Series E preference shares to its parent in the price band of Rs 8,320.05 rupees to Rs 9,065.13 rupees per share, its latest regulatory filings show.

On November 15, the company issued 80,528 shares at Rs 8,889.97 rupees a  share. The Hiveloop board approved the capital infusion on November 4 and the same was approved by shareholders on November 12. 

Separately, in October, Hiveloop raised $15 million in a growth round (Series E) from its Singaporean parent, prior filings show.

The Bengaluru-based company has so far raised $870 million. In early October, it raised $585 million in a growth round from new investors including China’s Tencent Holdings, Hillhouse Capital, Footpath Ventures, Altimeter Capital, GGV Capital and Citi Ventures. Returning investors in the round included Lightspeed Venture Partners and DST Global.

Read: Soaring valuations and Udaan’s bid to crack the B2B ecommerce code

In September 2018, the company raised $225 million. The round valued it at $1 billion valuation, catapulting it into the unicorn club. Unicorns are startups that are privately valued at $1 billion or more.

Udaan was founded by former Flipkart executives Amod Malviya, Sujeet Kumar and Vaibhav Gupta. The platform claims to connect 20,000 retail sellers to three million customers in 900 cities. It competes with other B2B players such as Jumbotail and Ninjakart.

This month, Jumbotail raised $2 million as part of ongoing Series B round from Nexus Venture Partners and Bengaluru-based Ninjakart raised $4.2 million from venture debt provider Trifecta Capital.

However, all online wholesale marketplaces combined have onboarded merely one lakh retail shops of the 1.5 crore kiranas in India, a Redseer report said. 

FY19 earnings

Udaan reported a massive widening of losses for the financial year ended March 31, 2019, on account of an almost six-fold increase in expenses. The company’s losses expanded to Rs 338 crore from Rs 59 crore. During the year it reported a 450% jump in total expenditure to Rs 363 crore, regulatory filings dated November 22 show.

The company spent Rs 41 crore on buyer refunds, against Rs 43 lakhs in the previous year, while outsourced manpower costs rose to Rs 85 crore from Rs 10.04 crore. Logistics costs increased two times to Rs 43 crore in FY19 from Rs 21.17 crore in FY18. The company paid Rs 47 crore to employees, higher from Rs 13 crore in the previous year. 

It also wrote-off assets worth Rs 33 crore during the year as against Rs 10 crore a year ago.

Udaan has been investing heavily in its logistics and credit verticals in order to onboard more kirana shops on its platform. The lending arm of Hiveloop Technology received an approval from the Reserve Bank of India to operate as a non-banking finance company.  

The company reported a four-fold growth in revenues from operations to Rs 12 crore. In addition, other income, which comes from investments, too almost equalled revenues at Rs 11.6 crore, taking total income to Rs 23 crore against Rs 6.5 crore in the previous year.