Microsoft joins B2B platform Udaan's $225 million debt round

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Microsoft Corporation has joined business-to-business (B2B) e-commerce platform Udaan's $225 million fundraising through the sale of convertible debt, chief financial officer Aditya Pande said in an email to employees on April 18. Microsoft participation comes ahead of Udaan's plans to go public in the next 12-18 months.

"We are excited to announce that Microsoft Corporation joined our convertible notes offering launched in October last year. M&G Prudential, Kaiser Permanente, Nomura, TOR, Arena Investors, Samena Capital and Ishana Capital amongst others participated in the convertible notes offering round," Pande wrote in the mail, a copy of which was seen by Moneycontrol.

The company had launched its convertible notes offering in October 2021 and was oversubscribed by two times. The round stood at $200 million last year and has now increased to $225 million with participation from Microsoft and others.

The notes will be converted into equity when Udaan raises funds next or during its planned Initial Public Offering (IPO).

Pande further wrote, "The step to bolster the balance sheet through mandatorily convertible notes to IPO highlights the continued evolution of Udaan’s capital strategy and is in line with our preparation for a public listing in the next 12-18 months. "

With the closure of the convertible notes round, the total funds raised by Udaan through debt and convertible cotes in the last six months have reached nearly $275 million.

Udaan last raised equity funding in January 2020, when it was valued at $3.1 billion. Its investors include DST Global, Lightspeed Venture Partners and GGV Capital, among others.

Founded in 2016 by three former executives of Flipkart -- Vaibhav Gupta, Amod Malviya and Sujeet Kumar-- the company has operations across categories including lifestyle, electronics, home & kitchen, staples, fruits & vegetables, FMCG, pharma, toys and general merchandise.

In September last year, the company said that Gupta has been appointed as the CEO in line with the evolution needed to become a publicly listed company in 18-24 months. Before the announcement, there wasn't a CEO structure in place with the three co-founders divvying up responsibilities.

Udaan said it has over 3 million users, 1.7 million retailers and 30,000 sellers on the platform across the country.

The platform enables supply chain and logistics operations focused on B2B trade and is built on strong technology, for daily delivery across 900+ cities and 12,000+ pin codes through udaanExpress.

It enables financial products and services to small businesses, manufacturers, and retailers through udaanCapital to grow their business.