Udaan Funding: Udaan Closes $ 200 Million Debt Financing Through Convertible Notes
Tor Investment, Arena Investors and M&G Investments are among the new investors who entered this round, sources familiar with the matter said.
For Udaan, which has announced its intention to go public in the next 18-24 months, the decision to resort to debt financing through convertible notes appears important. These investors will have the option of converting their convertible bonds into equities at a later stage, potentially before the IPO.
“We are thrilled and happy to share that we have five new top investors aboard the Udaan juggernaut, as part of our recently completed convertible note financing. This round was twice oversubscribed and also saw participation from our existing investors, including those who bought the company through the secondary round (Esop) in the first half of 2021, ”Pande said in his note.
According to him, the latest funding reflects Udaan’s “capitalization strategy” as she begins her IPO journey. “With this convertible offering, we, as a company, have started to build a whole new muscle in our finance function – which we will continue to strengthen as we move forward,” added Pande. He was previously the CFO of IndiGo, the airline.
Udaan did not immediately respond to ET’s request for debt financing through the convertible note instrument. Pande said in his memo that companies like Airbnb, Uber and Spotify had raised similar debt financing through convertible notes before their IPOs.
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The Bengaluru-based company had also raised $ 50 million in traditional debt financing.
Udaan underwent a major change in its management last year. In September, one of its co-founders, Vaibhav Gupta, was appointed CEO of the company. At the time, Udaan said in an official statement that Sujeet Kumar and Amod Malviya, the other two co-founders, will support the functioning of a CEO-led organization and continue to shape the strategic roadmap and investment decisions. as active members of the board of directors.
Sources said the Bangalore-based company explored a private equity fundraiser last year and appointed investment banker Goldman Sachs. But the company was unable to mop up equity funding at the time, sources told ET.
In January 2020, it raised $ 280 million in continuation of its previous funding round of $ 585 million, after which it was valued at $ 3.1 billion.
In total, he has now raised over $ 1 billion from investors such as DST Global, GGV Capital, Lightspeed Venture Partners, Altimeter Capital and Tencent.
Founded by former executives of Flipkart, Kumar, Gupta and Malviya, Udaan increasingly seeks to sell directly to customers through services like Pickily and Price Company. ET first announced in November that it was entering the consumer-focused grocery business through the group or community buying model with a new platform called Price Company, similar to Chinese company Pinduoduo.
While Pickily is an online supermarket app for Level I customers, Price Company is a group buying platform to serve customers beyond major cities. ET had reported that Udaan aimed to leverage its existing supply chain network in these markets to rapidly expand the new business in 2022. Pickily has a presence in parts of Bengaluru and Hyderabad.