India’s Udaan secures $160 million in new funding as it races to fix its balance sheet before an IPO

Indian B2B ecommerce platform Udaan has secured $160 million in a funding round that combines fresh equity from a new investor, additional debt, and the conversion of existing convertible bonds into equity, according to Bloomberg. Lightspeed Venture Partners and M&G Investments are participating in the round. The deal is designed to clean up Udaan’s balance sheet ahead of a planned initial public offering that the company expects within the next two years.

The timing matters because Udaan defaulted on $170 million in convertible notes that matured on June 30, according to Business Standard reporting from earlier this month. Under the new arrangement, a new investor is providing fresh equity while existing bondholders are converting their holdings into shares. Bondholders who chose not to convert have had their remaining notes extended on revised terms.

Udaan was founded in 2016 by three former Flipkart engineers and has built a marketplace connecting manufacturers and wholesalers with more than three million small retailers across India. The platform covers categories including electronics, groceries, pharmaceuticals, and general merchandise, and claims roughly 70 percent of India’s business-to-business ecommerce market by volume, according to industry estimates cited by Caproasia. Vaibhav Gupta, one of the three co-founders, became chief executive in 2021 after co-founder Amod Malviya stepped back, while the third co-founder Sujeet Kumar remains on the board.

The company has raised repeatedly in recent years to shore up its finances. It closed a $75 million round in February 2025, followed by a $114 million Series G in June 2025 that valued Udaan at under two billion dollars, according to VarIndia and Outlook Business. That figure is a steep discount from the three billion dollar peak the company reached during an earlier funding cycle, reflecting the correction that swept through Indian startup valuations after 2022.

The IPO ambition puts Udaan alongside a growing queue of Indian technology companies preparing for public listings. Fintech firm Razorpay filed confidential IPO papers with India’s market regulator last month, and AI startup Sarvam raised $234 million at unicorn status in June, signalling renewed investor appetite for Indian tech. For Udaan, the path to a listing depends on whether its restructured debt and fresh capital can deliver the kind of margin improvement that public market investors will demand.

India’s B2B ecommerce sector remains largely unorganised, with tens of millions of small retailers still sourcing goods through fragmented supply chains. That structural gap is Udaan’s opportunity, but the company must first prove it can turn market dominance into sustainable unit economics, a question the bond default has made more urgent.