Startup Deep Dive : Udaan — how India’s fastest unicorn shrank its way toward profit

Udaan booked a net loss of ₹1,055.4 crore ($110 million) in the year its own management called a turnaround. In FY25, revenue fell 20% to ₹4,561.4 crore even as the loss shrank 37% — and inside Udaan, that combination counts as good news. The company that set out to be India’s answer to Alibaba has spent the past three years getting smaller on purpose, because the only metric that matters now is the one an IPO prospectus will scrutinise: can the business survive without fresh outside money.

That is the contradiction at the heart of Udaan’s story. It became India’s fastest startup to reach unicorn status, raised more than $2 billion, and built a supply chain that reached deep into towns Amazon and Flipkart barely touched. Then its valuation was marked down by more than half, it fired hundreds of employees in multiple rounds, and it deliberately shrank its own revenue to chase a profit line. Whether that bet pays off is the question this piece tries to answer with numbers, not adjectives.

Quick facts

What they do

Udaan runs a business-to-business marketplace that sells wholesale goods to small retailers — kirana stores, pharmacies, restaurants and local traders — instead of to individual shoppers. A retailer opens the Udaan app, orders staples, packaged food, pharmaceuticals or general merchandise in bulk at wholesale prices, and Udaan’s own logistics network, Udaan Express, delivers it. Layered on top is a lending business that extends short-term working capital to the same retailers, so they can restock without waiting on cash flow. It is, in effect, three businesses in one: a trading marketplace, a logistics company and a small-ticket lender, all built to serve the same shopkeeper.

The origin

Udaan was started in 2016 by three people who had just spent years building Flipkart’s back end rather than its storefront. Sujeet Kumar had been President of Operations at Flipkart; Vaibhav Gupta was a Senior Vice President there; Amod Malviya had been its Chief Technology Officer. None of them came from retail in the traditional sense — they came from solving the plumbing problem behind India’s largest consumer e-commerce company, and they turned that lens on wholesale trade (YourStory, September 2019).

Their insight was that India’s small retailers — kirana stores, pharmacies, local traders — were stuck buying from a chain of middlemen with no price transparency, unreliable stock and almost no access to formal credit. Udaan’s pitch was to replace that chain with an app: one place to order at a fixed, visible wholesale price, with delivery and credit bundled in. The company launched its beta in Bengaluru in late 2016 and expanded category by category from there (YourStory, September 2019).

The struggle years

Udaan’s most visible growth years were followed by a run of retrenchments that make its later “profitability push” look less like a strategy and more like a survival plan playing out in slow motion.

The first wave came in 2022. Inc42 reported that Udaan cut around 180 roles in one round that year, then followed it months later with a second round of about 350 more — roughly 500 jobs gone across two rounds inside twelve months, as the company reorganised its verticals under cost pressure (Inc42, 2022). That same year, revenue that had touched roughly ₹9,897 crore in FY22 was about to fall off a cliff.

It did, in FY23: operating revenue dropped 43.1% to ₹5,609.3 crore, even as the company cut its net loss by a third, from ₹3,123.4 crore to ₹2,075.9 crore, largely by slashing manpower-outsourcing spend from ₹592.6 crore to ₹276 crore and logistics and packaging costs from ₹551.6 crore to ₹240 crore (Inc42, October 2023). Then in December 2023, days after closing a $340 million Series E, Udaan cut close to 120 to 150 more roles, according to separate reports from Inc42 and Business Today — a round of layoffs that landed while the ink on a fresh funding round was still wet (Inc42, January 2024; Business Today, December 2023). The same Series E marked Udaan’s valuation down from its January 2021 peak of $3.2 billion to somewhere between $1.3 billion and $1.8 billion, depending on which tracker’s methodology you use (Inc42, January 2024; Business Standard, January 2024; Entrackr, November 2024).

The turning point

If there is a single hinge in Udaan’s story, it is that December 2023 Series E round. Before it: a company that had raised money on a growth story, spread across categories from electronics to lifestyle to groceries, running in more than 80 cities, and still burning through roughly ₹3,123 crore a year even after its first big pullback. After it: a company that accepted a down round rather than hold out for its old valuation, fired staff within days of getting the cheque, and began publicly reframing its target from market share to EBITDA breakeven.

The numbers either side of that moment tell the story better than the framing does. FY22 revenue: about ₹9,897 crore, loss about ₹3,123 crore. FY25 revenue: ₹4,561.4 crore, loss ₹1,055.4 crore. Udaan did not grow its way to a smaller loss — it shrank its way there, cutting its top line by more than half while cutting its loss by two-thirds (Inc42, October 2023; Snackfax, February 2026).

The money behind it

Udaan has raised a reported $2.17 billion across 17 rounds as of June 2025, according to Inc42’s funding tracker. Three backers have shaped the company at different stages. Lightspeed Venture Partners came in as early as the September 2018 round that made Udaan India’s fastest unicorn at the time — a $225 million raise, led jointly with DST Global, that pushed the company past a $1 billion valuation roughly 26 months after launch (TechCrunch, September 2018; Inc42, September 2018; Entrackr, September 2018). DST Global stayed on through multiple rounds, including the 2023 rescue financing. M&G Investments (M&G Prudential) is the newer name in the cap table: it led the December 2023 Series E — a $340 million round that mixed fresh equity with the conversion of existing debt — and returned to co-lead a further $114 million Series G alongside Lightspeed in June 2025 (Inc42, January 2024; Inc42 funding tracker, accessed September 2026).

Each backer changed the company’s trajectory differently: Lightspeed and DST Global’s early money bought Udaan the fastest unicorn tag and funded its multi-category expansion; M&G’s 2023 and 2025 capital effectively kept the company funded through its down round and layoffs, betting on the turnaround rather than the original growth story. The relationship deepened further in July 2026, when Udaan announced roughly $160 million in structured financing — $50 million to $60 million of fresh equity from existing backers including Lightspeed and M&G, alongside about $45 million of private credit from BlackRock and a conversion of outstanding convertible bonds into equity — explicitly aimed at tidying the balance sheet before a public listing (Bloomberg, 14 July 2026; Entrackr, July 2026).

How it makes money

Udaan is not a pure marketplace that simply charges commission on other people’s sales — for most of its history, it has bought and resold goods itself. Its own FY23 disclosures showed that sale of traded goods made up 96% of its gross merchandise value, meaning Udaan takes ownership of inventory, sells it on to retailers, and earns the spread between its buying and selling price (Inc42, October 2023). Layered onto that trading margin are two further income lines: delivery charges through its own Udaan Express logistics network, and interest income from working-capital loans extended through its NBFC arm, now folded into an entity called Hiveloop Capital (formerly Udaan Capital).

The part outsiders often get wrong is treating Udaan like an asset-light tech platform skimming a commission. It is closer to a wholesaler with a logistics fleet and a lending book bolted on, which is exactly why its margins are thinner and its capital needs heavier than a typical marketplace — and why cutting loss-making categories, rather than simply adding more sellers, has been the lever that actually moved its bottom line since FY23.

The numbers

Four years of disclosed financials show the shape of the pullback plainly: revenue nearly halved from its FY22 peak, while losses fell every single year over the same period.

Read the sequence in order and the FY24 blip stands out: revenue actually rose 1.7% that year, from ₹5,609.3 crore to ₹5,706.6 crore, before management chose to cut it again in FY25 by exiting more categories. That is not a company failing to grow — it is a company actively choosing not to, because the categories it would have grown in were the ones dragging on its margin (Inc42, October 2023; Entrackr, November 2024; Snackfax, February 2026).

Where the money comes from

Udaan used to run two broad business groups — an “Essentials” arm covering FMCG, staples and pharma, and a “Discretionary” arm covering general merchandise, lifestyle and electronics — before merging the two into a single structure in a 2023 reorganisation (Business Standard, September 2023). The surprise is which half won. As part of its FY25 pullback, Udaan exited lifestyle, general merchandise and home-and-kitchen categories altogether, concentrating instead on groceries and other essential items — the lower-margin, higher-frequency categories that used to be considered the less exciting half of the business (Snackfax, February 2026). The same period saw the company narrow its city footprint from around 80 cities to 16, while still serving roughly 200,000 retail shops from that smaller base (Snackfax, February 2026). In 2025 it also launched Horeca360, a vertical dedicated to supplying hotels, restaurants and caterers — a bet that food-service demand, unlike general retail, holds up regardless of discretionary spending cycles.

The risks

Three risks sit underneath Udaan’s turnaround narrative, and none of them are hypothetical.

The first is repeated dependence on outside capital to plug the balance sheet. The December 2023 Series E converted existing debt into equity while adding new money; the July 2026 financing did much the same, mixing $50 million to $60 million of fresh equity with roughly $45 million of BlackRock private credit and another debt-to-equity conversion (Bloomberg, 14 July 2026). A company preparing for an IPO on the strength of shrinking losses still needs outside investors to keep saying yes until the day it actually breaks even.

The second is that the revenue base has been cut to get here. Udaan’s FY25 revenue of ₹4,561.4 crore is 53.9% below its FY22 level of ₹9,897.3 crore. Shrinking a loss by shrinking the business is a legitimate route to breakeven, but it also means Udaan will have to demonstrate to public-market investors that the smaller, essentials-focused business can grow again — a different pitch from the multi-category growth story that first attracted its venture backers.

The third is competition from rivals with much larger balance sheets behind them. Business Standard has reported on Udaan directly competing for the same retailers as Reliance’s JioMart and, separately, against Amazon Business and Flipkart Wholesale in the online grocery and general-trade segment (Business Standard, December 2021; Business Standard, April 2022). Unlike Udaan, those rivals can subsidise wholesale pricing from much larger parent balance sheets, which limits how much room Udaan has to raise prices even as it tries to improve its own margins.

The takeaway

The transferable lesson from Udaan is not about e-commerce or even India’s kirana economy — it is about what happens when a company built to prove a growth story has to reverse the instrumentation and prove a profitability story instead. Udaan spent its first six years chasing scale: more cities, more categories, more retailers on the app. It has spent the years since 2022 doing the opposite, and management is calling that discipline. The two things can both be true — that a company grew too fast to be sustainable, and that shrinking it back down is now the only credible way to show investors it was ever a real business at all. Founders building for scale first should treat that as a warning: the metric you chase early is not always the metric you will be judged on when the money gets expensive.

Frequently asked questions

What does Udaan do?

Udaan runs a business-to-business wholesale marketplace that sells goods such as groceries, staples, pharmaceuticals and general merchandise to small retailers, backed by its own logistics network, Udaan Express, and a working-capital lending arm.

Who founded Udaan and when?

Udaan was founded in 2016 in Bengaluru by Sujeet Kumar, Vaibhav Gupta and Amod Malviya, all former senior executives at Flipkart.

Is Udaan profitable?

Not yet. Udaan reported a net loss of ₹1,055.4 crore in FY25, though that was a 37% improvement over its FY24 loss of ₹1,674.1 crore, and the company has said it is targeting group-level EBITDA profitability within 12 to 18 months of its FY25 results (Snackfax, February 2026).

What is Udaan’s current valuation?

Udaan’s valuation was last repriced in its December 2023 Series E round, with different trackers reporting figures between $1.3 billion and $1.8 billion — down from a peak of $3.2 billion in January 2021 (Inc42, January 2024; Business Standard, January 2024; Entrackr, November 2024).

Is Udaan planning an IPO?

Yes. Udaan is in the process of reverse-flipping its Singapore-based holding structure into its Indian entity, Hiveloop Ecommerce, and has said it is targeting a public listing once it reaches sustainable profitability (Entrackr, 2026; Angelone, 2026).

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Inc42, “Udaan’s Operating Revenue Drops 43% To INR 5,609 Cr In FY23”, October 2023
• Entrackr, “Udaan’s growth stalls mid-flight, losses down 19% in FY24”, November 2024
• Snackfax, “Udaan Cuts Losses Sharply In FY25 As Revenue Slides After Strategic Pullback”, February 2026
• Inc42, “Udaan’s Valuation Drops By Nearly 50% To $1.8 Bn In Down Round”, January 2024
• Business Standard, “Udaan’s valuation shrinks by 43.5% to $1.7 billion in Series E round”, January 2024
• Inc42, Udaan company funding profile (accessed September 2026)
• TechCrunch, “Udaan, the e-commerce startup led by three former Flipkart executives, raises $225M”, September 2018
• Inc42, “With $225 Mn Funding, Ex-Flipkartians’ B2B Online Marketplace Udaan Becomes India’s Fastest Unicorn”, September 2018
• Entrackr, “B2B e-com marketplace Udaan becomes fastest Unicorn, bags $225 Mn from DST, Lightspeed”, September 2018
• Business Standard, “Udaan names co-founder Vaibhav Gupta as CEO, eyes IPO in 18-24 months”, September 2021
• Inc42, “Exclusive: B2B Ecommerce Unicorn Udaan Lays Off 180 Employees To Cut Costs”, 2022
• Inc42, “Udaan Fires 350 Employees In Second Wave Of Layoffs This Year”, 2022
• Business Today, “Udaan lays off 150 employees days after securing $340 mn”, December 2023
• YourStory, “Bridging the gap: how B2B ecommerce startup Udaan…”, September 2019
• Business Standard, “Udaan makes organisational changes in business and tech verticals”, September 2023
• Entrackr, “Udaan to begin reverse flip to India ahead of IPO”, 2026
• Angelone, “Udaan to Shift Base from Singapore to India, Gears Up for IPO Amid Profitability Push”, 2026
• Bloomberg, “India’s Udaan Secures $160 Million to Boost Finances Before IPO”, 14 July 2026
• Entrackr, “Udaan announces $160 Mn structured financing to strengthen balance sheet”, July 2026
• Business Standard, “B2B e-commerce startup Udaan gives Reliance’s JioMart a run for its money”, December 2021
• Business Standard, “udaan takes on Amazon, Flipkart, JioMart to win Indian e-grocery market”, April 2022

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