Udaan’s financial woes continue despite new fundraise, revenue stagnates
B2B e-commerce platform Udaan is facing serious financial challenges despite securing fresh funds as the company’s revenue remained almost flat in FY24.
Its valuation also dropped sharply by 59.3 per cent to $1.3 billion, down from its peak of $3.2 billion, according to its financials.
This decline comes even as Udaan managed to cut its losses by 19.4 per cent over the year.
Udaan’s gross merchandise value (GMV) in FY24 saw only a 1.7 per cent growth, at Rs 5,706.6 crore from Rs 5,609.3 crore in the previous fiscal. This is a major setback for the company, as its GMV was much higher at Rs 9,900 crore in FY22.
The Bengaluru-based company primarily generates revenue from the sale of traded goods, platform fees, logistics services, credit services and advertising.
However, the sale of traded goods accounts for 98.5 per cent of its GMV, indicating a heavy reliance on this revenue stream.
Despite stagnant revenue, Udaan has been aggressively cutting costs to manage its finances.
The company reduced expenses in key areas, including employee benefits which was down by 35.4 per cent, logistics and packaging dropped 16.8 per cent, and outsourced manpower declined 39.3 per cent.
This cost-cutting helped bring total expenses down by 4.4 per cent to Rs 7,407.6 crore in FY24.
However, the cost of materials -- the biggest expense for the company -- increased by 4.2 per cent to Rs 5,576.8 crore.
Udaan’s losses reduced to Rs 1,674.1 crore from Rs 2,075.9 crore, according to its financials.
In an attempt to keep operations running, Udaan recently raised Rs 300 crore (over $35 million) in debt funding from investors such as Lighthouse Canton, Stride Ventures, InnoVen Capital, and Trifecta Capital.
The company has raised about $1.9 billion in debt and equity funding so far. However, the report suggests that the company might soon need another round of funding.
The firm has managed to improve its EBITDA margin and operating cash flow in FY24.
