Home Innovation Udaan | A B2B Trade Platform’s Flight to Success

Udaan | A B2B Trade Platform’s Flight to Success

Udaan is an all-inclusive trade platform that operates on the business-to-business (B2B) model. It brings together manufacturers, retailers, wholesalers, and traders from all parts of India, including both rural and urban areas. The mission? It’s to make B2B commerce in the country easy, convenient, and efficient.

Udaan Business Network

Udaan was founded on the belief that B2B is the new B2C. That is, for any business to thrive among its customers, it must first have access to reliable vendors and better supplier deals. The network-centric e-commerce platform helps retailers gain access to wholesalers selling more than 1.5 million different products across a wide variety of categories. Users of Udaan’s services can not only buy and sell items with secure payments and smooth logistics but also source merchandise from renowned brands and small-scale manufacturers alike. In addition to that, white-label and imported goods are also available on the same platform.

For startups that dream of joining the unicorn club one day, the journey is usually painstakingly long and laborious. Yet, Udaan completed it in just about three short years. How did this small startup company reach a valuation of over $1 billion? Read on to find out.

The article explores the humble beginnings of Udaan, its fast-paced expansion, and its current impact on the industry.

Preparing for Udaan – How It All Started

Udaan is a Bangalore-based service-oriented B2B platform currently owned and operated by Hiveloop Technology Pvt Ltd. However, it was the brainchild of three entrepreneurs from the former Flipkart, all of whom are IIT graduates.

Udaan came into existence in 2016 [1] when the intrepid trio, comprising Sujeet Kumar, Vaibhav Gupta, and Amod Malviya, designed a specialized logistic platform for small-scale dealers in electronics and apparels. Within 8 to 10 months of its launch, the platform had built a significantly large following.

The exposure to the online economy and e-commerce experience gained during this time prompted Udaan’s founders to expand their services into the supply side. Consequently, Udaan was redesigned as a full-stack platform for trading, lending, logistics, and more.

The new platform quickly gained traction throughout the country as it solved the core trade problems for businesses of all scales and types. Udaan empowered its users with advanced yet easy-to-use online solutions that helped them grow their respective businesses in no time.

Currently, Udaan is hailed as India’s largest national distribution marketplace. According to recent reports, the company is valued at $2.7 billion! [2]

Udaan’s Business Model – How It All Works

Udaan operates as an asset-light player. That is, the company neither owns any high-value assets nor does it plan to. Udaan merely helps businesses and other buyers discover sellers and relevant products in different categories so that both parties can make the best deal.

To ease the trading process for their customers, Udaan offers logistics support. Similarly, it also provides accounting services along with order and payment management solutions to all merchants for a seamless experience.

Furthermore, retailers purchasing goods at Udaan can also get working capital at reasonable rates. In other words, Udaan, besides being an online B2B marketplace, also underwrites loans for small businesses.

Here’s a brief overview of how Udaan works:

  1. Browse and Shop – Retailers and business owners navigate the marketplace and order the desired product in the desired quantity.
  2. Order Confirmation – Once the order is confirmed, the seller packs it up and marks it ready to ship.
  3. Pick-Up and Delivery – Udaan’s logistics team supervises the delivery of merchandise, ensuring it reaches the buyer promptly.
  4. Payment Receipt – What makes Udaan such a reliable B2B marketplace is that it collects payments once the goods are delivered. The amount collected from the retailer is then settled directly in the seller’s account.

Traders can use Udaan via desktop computers or its mobile app. The app is available on both the App Store and Google Play and compatible with smartphones running an older version of their respective OS.

The app allows users to:

  • Trade on their terms
  • Grow their businesses by accessing new brands and goods that are in demand
  • Find new customers and suppliers across multiple categories
  • Connect with interested buyers or relevant sellers and get the best deals

Going Above and Beyond Online Trading

It won’t be an exaggeration to say that Udaan’s proprietary solutions for online B2B trading are disrupting offline distribution as well. Whether it’s a low-level trader in a small town or a big business in a metropolitan city, Udaan puts all trading options in front of its users.

With Udaan, brick-and-mortar store owners who have been dependant on traditional trading practices so far can now enjoy the convenience of e-commerce without having to take their business online.

As part of its mission to bring the benefits of online trading to offline business owners, Udaan makes payments easier via its credit buying option. Verified buyers at Udaan can avail credit limit for INR 10,000 to up to INR 500,000 depending on the type of order and purchase experience with Udaan. Udaan does not make money via these funds. In other words, the working capital loans it offers to its buyers are completely interest-free.

While it started logistics services for just electronics and apparel, this B2B trade platform has now diversified operations across a broad range of categories. This includes home and kitchen items, lifestyle goods, personal care and hygiene products, staples, fruits and vegetables, and even pharmaceutical products.

Udaan boasts a customer base of over 3 million. Its users include general retailers and wholesalers, chemists, utility store owners, farmers, and other businesses in the foodservice and hospitality industries. Its team of 3,000+ employees delivers thousands of goods across 900+ cities throughout India on a daily basis.

Udaan has a seed fund of $10 million but has raised around $1.2 billion in investments so far. It recently captured a Series D round worth $280 million [3]. 

Displaying vigor true to its name, Udaan has taken a remarkable flight to reach the heights where it stands today. The online marketplace has uniquely positioned itself for lasting success by offering exclusive services that solve the most pressing problems for business owners. 

References:

[1] https://www.crunchbase.com/organization/udaan

[2] https://craft.co/udaan

[3] https://pitchbook.com/profiles/company/168408-91#overview

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