In a significant downturn, Udaan, the B2B ecommerce unicorn based in Bengaluru, has witnessed a substantial devaluation, dropping close to 50% from its previous high of $3.2 billion. The latest valuation now stands at approximately $1.8 billion, signaling a challenging period for the once-flourishing startup.
Udaan’s Valuation Plunge: Understanding the Down Round
Udaan’s valuation slump comes on the heels of its last valuation of $3.2 billion, achieved in January 2021. The recent down round, where the company secures funding at a lower valuation compared to its previous rounds, indicates the hurdles the startup is currently navigating.
Series E Funding and the Unfolding Scenario
In December of the previous year, Udaan raised $340 million in its Series E funding round. Led by UK-based M&G Prudential, the round also saw participation from existing investors Lightspeed Venture Partners and DST Global. This funding included both fresh equity investment and the conversion of existing debt, highlighting a mix of financial strategies.
Operational Adjustments Lead to Workforce Reduction
Despite the recent funding boost, Udaan took a step towards operational adjustments, reportedly letting go of nearly 120 employees shortly after the Series E funding round. The company’s spokesperson emphasized a commitment to building a profitable business and indicated that the redundancies were a consequence of interventions made in the business model.
CEO’s Focus on Cost Reduction and Operational Profitability
According to reports, Udaan’s CEO, Vaibhav Gupta, has underlined a primary focus on cost reduction in each quarter. The company’s team is reportedly working quarterly to align with this directive, establishing specific operational targets. Udaan has communicated its objective of achieving operational profitability within the next two quarters to its investors.
Challenges in the Unicorn Realm: A Broader Trend
Udaan joins the ranks of unicorns facing devaluation, with global asset manager BlackRock recently slashing BYJU’S valuation by a staggering 95%, down from $22 billion to $1 billion. The challenges faced by these unicorns highlight the evolving dynamics and the need for adaptability in the current business landscape.
As Udaan charts its course through this period of adjustment, industry observers will keenly watch for strategic moves and the startup’s ability to rebound in the fiercely competitive B2B ecommerce sector.
