Udaan Secures $114M for Scaled Profitability

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India’s B2B e-commerce firm Udaan has raised $114 million in fresh equity funding, led by M&G Investments and Lightspeed. The infusion strengthens the company’s financial position as it pushes for scaled growth and prepares for a long-anticipated public listing.

The capital will be directed toward expanding operations across key product verticals, notably fast-moving consumer goods (FMCG) and the Hotel, Restaurant, and Catering (HoReCa) segment—sectors critical to India’s fragmented retail landscape. The Bengaluru-based startup will also double down on its private label strategy in staples, aiming to improve margins and create brand stickiness.

This funding marks a pivotal point in Udaan’s shift from a cash-intensive growth model to a profit-focused trajectory. Over the past three years, the company claims to have reduced its EBITDA burn by 40% annually. In 2024 alone, fixed costs dropped by 20%, with an additional 20% reduction in burn year-to-date for 2025. CEO and Co-founder Vaibhav Gupta said the firm has “built cost as a capability,” targeting full EBITDA profitability within 18 months.

Founded in 2016, Udaan operates at the intersection of commerce and technology, enabling small retailers and businesses across India to procure inventory directly from brands and manufacturers. The platform aims to modernize India’s supply chain, which remains deeply unstructured in much of the country.

Udaan’s regional cluster-led model and operational streamlining reflect a broader trend in Indian startups: disciplined scaling with an eye on public market viability. With funding winters still fresh in memory, investor backing from institutional names like M&G indicates renewed confidence in sustainable B2B ventures.

As India’s retail backbone continues to digitize, Udaan’s next chapter — likely its IPO, will be closely watched as a litmus test for tech-enabled wholesale commerce.