Udaan sees growth after four years with 13% rise in revenues
Udaan has shifted to a cluster-led operating model with greater accountability for performance at the city and category levels, according to Vishnu Menon, the company’s senior vice president, business finance. The approach marks a move away from expanding across markets towards improving efficiency and profitability in existing ones, he said.
Udaan, a Bengaluru-based business-to-business e-commerce platform, has returned to growth in FY26 after four years of decline, while simultaneously reducing its losses. The company's operating revenues surged by 13% to Rs 5,134 crore, according to financial documents filed by its parent company in Singapore. Revenues had dropped by 20% in FY25, following a 1% increase in FY24 and a 40% decline in FY23. Udaan's net loss also decreased by 19% to Rs 850 crore in FY26.
The company has implemented a cluster-led operating model, concentrating on performance accountability at city and category levels. This change, initiated by Vishnu Menon, Udaan's senior vice president, strategy and business finance, shifts the company's focus from expanding into new markets to improving efficiency and profitability in existing ones.
Menon explained in a LinkedIn post that private label businesses now contribute 15-25% of staples sales across operating cities, resulting in enhanced margins, increased wallet share, and more value derived from Udaan's existing sourcing and distribution infrastructure.
Bengaluru, Udaan's largest market, has also become EBITDA positive under the new model. To maximize buyer penetration, Udaan is now targeting smaller, high-density clusters within individual pin codes or groups of pin codes, as opposed to focusing on larger geographical market segments. In July, Udaan closed a $160-million recapitalization, raising funds through a mix of fresh equity, debt, and conversion of debt into equity, including $45 million in private credit from BlackRock.
The Lightspeed-backed company has also engaged in acquisitions. In September, Udaan purchased Lynk Logistics, a retail distribution firm owned by food and grocery delivery platform Swiggy for Rs 500 crore. Swiggy received a 2.8% stake in Udaan as part of the deal, and an additional Rs 75 crore investment for a 0.4% stake. Earlier in July 2024, Udaan acquired a 100% stake in InfoEdge-backed retail tech startup ShopKirana in an all-stock deal.
Udaan cofounder and CEO Vaibhav Gupta called the acquisition a "strategic milestone in our journey to the IPO and beyond". Gupta and co-founders Sujeet Kumar and Amod Malviya have been focusing on the company's operations since 2024.
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