BENGALURU—Approximately 350 employees have been laid off from B2B e-commerce startup Udaan, which recently raised $120 million in convertible notes and debt. This is the second round of layoffs for the startup, which had previously let go of around 200 workers.
Udaan confirmed the layoffs and added, “Over the last few years, we have taken various steps towards building udaan as a world-class institution that will last beyond our lifetime.” We will continue to improve our cost structures and models because we know that doing so is essential to sustaining profitable expansion.
Another statement from the company’s spokesperson read: “In this direction, we have taken numerous steps, with enhanced digital capabilities, to achieve efficiency and scale, become more agile, and remain competitive in the marketplace.”
“As we move forward on our path to making Udaan a profitable company, the efficiency enhancement drive and the evolution in the business model have created some redundancies in the system, with some roles no longer required.”
Tencent and Lightspeed Ventures are investing in the young company, and its leaders are planning an initial public offering within the next year to two. Udaan was established in 2016, and it currently runs businesses in the lifestyle, electronics, home & kitchen, staples, fruits & vegetables, fast-moving consumer goods, pharmaceuticals, toys & games, and general merchandise sectors. It relies on a large number of contract workers in addition to its regular staff.
The start-up industry is currently bracing for a long funding winter, so these layoffs come at a bad time. In a tweet, Unacademy co-founder Gaurav Munjal predicted a worsening of the season. Faster profitability is required. Eventually expanding upon that foundation. Put a stop to all wasteful spending. Concentrate on creating high-quality products and natural distribution channels for growth, he advised.
Udaan Fires 300-350 Employees
The Indian business-to-business e-commerce platform Udaan was launched in 2016. The company has a wide range of business interests, including the lifestyle and electronics industries as well as the pharmaceutical, fast-moving consumer goods, home and kitchen, fresh produce, pantry staples, toys, and general merchandise sectors.
It has been reported that the company is worth around $3.1 billion. Lightspeed Venture Partners, Altimeter Capital and Tencent, GGV Capital, Octahedron Capital, and Moonstone Capital are among the firm’s investors. The main office is in Bengaluru.
With the goal to “transform the way trade is done in India by leveraging technology,” three graduates of India’s top engineering institutions, IIT Delhi and Kharagpur, founded the company.
According to Entrackr’s sources, Udaan will lose between 300 and 350 workers in the next round of layoffs. The Morning Context broke the news of impending layoffs on Friday morning. In June, 180 people lost their jobs. The current employee count exceeds 3,000.
Udaan’s operating revenue increased by a factor of six from Rs 1,219 crore in FY21 to Rs 5,919 crore in FY22, despite the company continuing to incur roughly the same level of losses.
According to the spokesperson, Udaan will continue to receive funding because of the great potential offered by Kirana commerce in the empowerment of small businesses across the country. The company is professionally run and has the necessary scale, capabilities, and resilience to take advantage of this opportunity.
No promises were Udaan has raised $120 million in convertible notes and debt. that further layoffs or budget cuts would not be necessary. The spokesperson stated that improving the company’s cost models and structures would be a top priority.
Udaan Has Raised $120 Million In Convertible Notes And Debt
About 60% of India’s small and medium-sized enterprises (SMEs) are served by the company. This includes 15 million manufacturer clients, 25-30 million retailer clients, and 10-12 million institutional clients such as offices, schools, hospitality, etc.
More than 3 million buyers and sellers have signed up across 900 cities in India. Businesses like supermarkets, convenience stores, and farmers’ markets make over $4.5 billion in sales each month.
The company aspires to be the go-to trusted advisor for small business owners by providing them with the resources they need to compete with the tech giants on all fronts (money, technology, and infrastructure).
The company’s decision to raise $120 million in convertible notes and debt was announced in an email sent out by CFO Aditya Pandey to shareholders and bondholders.
Udaan, an Indian startup, has received more funding than any other company in the country in recent years. After a $1.4 billion funding round in January 2021, Fintrackr predicted the company was worth $3 billion.
Even though Udaan has not yet filed its annual financial statements for FY22, its operating income increased 6X in FY21, from Rs 978 crore in FY20. With a fiscal year ending in March 2021, the company’s losses rose by only 1.4% to Rs 2,482.3.
Udaan states in the email that their gross margins and operating costs have both increased by one thousand basis points. The company’s burn rate also decreased by 60%, according to their reports. In addition, Pandey mentioned in his email that preparations are being made for an initial public offering within the next 12-18 months.
What Exactly Does This Firm Do?
This new company specializes in facilitating online transactions between businesses. When it comes to running a company, manufacturers, traders, and others can benefit from B2B platforms because they centralize access to all the tools they need. To the benefit of merchants, wholesalers, retailers, and producers alike, Udaan provides high-quality goods at affordable prices.
It also allows marketers and merchants to sell their wares on the platform. UdaanExpress also facilitates product delivery to customers. It provides SMEs with access to capital through its udaanCapital platform.
Udaan applies technology to the problem of small business supply chain inefficiencies.
Small and medium businesses in India benefit from the company’s “unique low-cost business model designed for India” because of the way it uses technology to its advantage and brings the advantages of e-commerce to Indian businesses.
Udaan has leveled the playing field for brands, retailers, and manufacturers by providing them with accessible technological resources for expanding their operations, facilitating trade, and facilitating growth.
Eight edtech startups collectively raised $325 million in March, as reported by Entrackr in its monthly report. Entrackr found that between January 1 and August 15, 2022, funding for edtech startups dropped from $5.82 billion to $2 billion.
Byju’s, Sunstone, and Adda247 all raised over $30 million, while Bhanzu snatched up $15 million, signaling a possible uptick in the edtech sector.
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