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 UDAAN (CASE STUDY & BUSINESS MODEL

“Aise jagah jahan par buses milna mushkil hai (such inaccessible places where getting a bus is difficult), the retailers are dependent on Udaan for sourcing and procuring of materials,” says Sujeet

WHATS IN IT FOR ME ?

About Udaan.com – Overview

 

Udaan is a B2B trade marketplace which is especially designed to empower, retailers, wholesalers, traders, and manufacturers using technology as a source.

Udaan is run by Hiveloop Technology Pvt. Ltd and is a special initiative for small and medium businesses in India.

The main idea was to connect wholesalers, traders, retailers and manufacturers on a single platform via a mobile app.

The udaan app enables users the access to real insights into active trends and many other premium B2B trade features.

It has enabled small and medium business owners to use the power of technology to nurture and scale their businesses.

 

How Udaan Started – Initial Days

 

Have you ever heard about the Unicorn club for start-ups ?

A startup has to be valued at $1 billion or above if a privately held startup wishes to be in the unicorn club.

Udaan has recently entered into the Unicorn club.

We will be talking about the growth and also its secrets but before let us first discuss about the initial days of the Unicorn startup – Udaan.com

Udaan was founded in the year 2016 by the former employees of the Ex-flipkart.

Amod Malviya, Vaibhav Gupta and Sujeet Kumar is the trio who founded Udaan.
We will be talking more about the founders and their contribution further in the blog.

Initially, Udaan was started only as a logistic platform for small buyers and sellers in electronics, staple and apparels.
That time they only focused on logistics for approx. 8 to 10 months.
They got very much exposure within India which was very significant for the startup at that time.

During those days, Udaan have built a huge data database of buyers and sellers before they stepped into the supply business.

Also, Very soon Udaan is eyeing to become a lending platform for merchants.

Udaan is trying to build a full stack platform for small and mid-sized enterprises which will be the combination of a marketplace, logistics, and lending.

Udaan business Model

  Let me explain to you the whole business model of Udaan in a very straight-forward and simple words. Udaan is a Business to business marketplace on which manufacturers and wholesalers can sell their products to retailers via online platform or mobile app. And, the company provides logistics, secure payments and technology support also. They are the asset-light player based on their Business Model. They do not believe in owing assets and also are not planning to go asset-heavy as of now. Udaan helps businesses discover customers, suppliers and products across categories and connect them in order to get the best deal. The platform also facilitates secure payments and gives logistics support. The company also offers accounting, order management and payment management solutions to merchants on their platform. The Promoters of the company found that financing working capital has been a major headache for end retailers. The retailers end up borrowing from local lenders who charge exorbitantly. Udaan intends to provide working capital(funds) to them at a reasonable rates. So, apart from being a platform for retailers and wholesalers, it has also started underwriting loans for these small businesses. It has also received a non-banking financial company (NBFC) licence for the purpose of providing finances to SMEs.    

Revene Model – How Udaan earns ?

 

Before getting to the revenue model, lets talk about market size and opportunity,
Going by the reports, there are 50 Million SME(Small and medium enterprises) in India and a total number of transactions that take place across these segments have have crossed 600 billion.

The sector has also been characterised by a lot of inefficiencies such as in Logistics, Capital as well as in sales and marketing.

These are the main pain points as well as opportunities for a B2B business online portal like Udaan.

Talking about the revenue model, I have tried to get in touch with the team of Udaan for interaction but unable to achieve so.
So, all the data about the revenue has been collected from anonymous but credible sources.

Udaan has been the combination of a marketplace, logistics, and lending.

In order to understand the demand and supply aspects across the different categories, the founders of Udaan Focused only on the logistics part for about 8-10 months.

It helped them to establish a relationship with the buying and selling community.

Now, Udaan has been the combination of a marketplace, logistics, and lending.

Udaan charges a percentage on sales as a commission which varies in different categories.

Udaan also charges for the logistics in the form of delivery charges from the buyer which also varies according to the product and quantity.

They provide credit limit to the only verified buyer that too if is eligible for the limit.
At first, they will provide Rs. 10000/- credit with no interest charges then the credit limit will be increased to maximum of Rs. 250000/-.

At the moment, Udaan doesn’t intend to make money through providing funds for working capital for its buyers so they do not charge any interest on the credit.

Who initiated Udaan – Founders of udaan.com

The initial Idea of Udaan.com was of the ex-flipkart employees – Amod Malviya, Vaibhav Gupta and Sujeet Kumar.

Vaibhav Gupta was the former Senior VP at flipkart.

Whereas Sujeet Kumar worked as supply chain, built operations and logistics executive at Flipkart.

And Amod Malviya was the Chief Technology Officer at flipkart. 

 

Facts and figures about Udaan

In the fiscal year 2018, the company Udaan reported its revenue of ₹65 crore. Whereas total expenses were ₹66 crore and losses of ₹59.5 crore.

 

Categories  B2B, Business Development, Internet,
Headquarters Regions  Asia- Pacific (APAC)
Founded Date  2016
Founders  Amod Malviya, Sujeet kumar, Vaibhav Gupta
Funding Status Late Stage Venture
Last Funding Type  Series D
Number of Employees 1001-5000
Legal Name  Hiveloop Technology Private Limited
Hub Tags Unicorn
IPO Status Private
Company type For profit

 

Digital Links

 

Website  udaan.com/
Facebook  View on Facebook
LinkedIn  View on LinkedIn
Twitter  View on Twitter
Contact Email  [email protected]

 

Udaan Mobile app has approx. 22,657 monthly downloads and is increasing with a growth of 42.98% every month.

Udaan’s official website is Udaan.com which is ranked 36,420 among websites globally based on its 1,277,588 monthly web visitors.

 

Funding Round

 

Investor’s Interest in the B2B E-Commerce platforms has been increasing considerably.

Udaan – Bangalore based B2B e-commerce marketplace for retailers, wholesalers, traders, and manufacturers have raised a total of $681.3 M in over 7 rounds of funding.

Starting from raising $10 M in Series A funding on Nov 23, 2016 which was lead by Lightspeed Venture Partners.
Till the latest funding of $300 M in series D on August 30, 2019 lead by Altimeter Capital and DST Global.

I have listed the details of all the fundings that the startup has raised till date.

Lead Investor Amount Raised Funding name Announced Date
Altimeter Capital, DST Global $300M Series D – Udaan Aug 30, 2019
Trustroot Internet ₹689.8M Series D – Udaan Jul 25, 2019
Trustroot Internet ₹344.2M Series D – Udaan Jul 5, 2019
Trustroot Internet ₹5.7B Series D – Udaan May 6, 2019
DST Global, Lightspeed Venture Partners $225M Series C – Udaan Sep 3, 2018
Lightspeed Venture Partners ₹3.2B Series B – Udaan Feb 21, 2018
Lightspeed Venture Partners $10M Series A – Udaan Nov 23, 2016

 

Competitors of Udaan

 

Top Competitors of Udaan are –

  • ZoomTailZoomTail is seen as one of Udaan’s top competitors.
    Bengaluru-based Zoomtail Technologies Pvt. Ltd offers e-commerce enabler solutions for fashion retailer.ZoomTail Technologies is building India’s largest B2B e-commerce platform for fashion consumer goods.
  • Bigtrade One of the top rivals of Udaan is Bigtrade which was founded in the year 2017.BigTrade having its headquarters is in Bangalore, Karnataka is one of Udaan’s top rivals.
  • Tradekosh
    TradeKosh is a Pune based startup which was founded in the year 2018.TradeKosh is Udaan’s #3 rival as it is also an online B2B marketplace that connects retailers and manufacturers.

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