SUMMARY
- Udaan’s revenue remained flat in FY24 with its GMV growing only 1.7% to Rs 5,706.6 crore in FY24.
- Udaan managed to reduce its losses by more than 19% to Rs 1,674.1 crore in FY24.
- Udaan’s total expenses decreased by 4.4% to Rs 7,407.6 crore in FY24.
Bengaluru-based B2B ecommerce platform Udaan‘s revenue remained flat in FY24 with its gross merchandise value (GMV) growing only 1.7% to Rs 5,706.6 crore from Rs 5,609.3 crore in FY23. This was a significant decline from its peak GMV of Rs 9,900 crore in FY22.
Udaan generates revenue through various channels, including the sale of traded goods, platform fees, logistics services, credit services, and advertising. The sale of traded goods remains the largest revenue driver, accounting for 98.5% of the total GMV.
Despite the flat revenues, Udaan managed to reduce its losses by more than 19% from Rs 2,075.9 crore in FY23 to Rs 1,674.1 crore in FY24. Its operating cash flows improved by 28.8% to Rs -920.5 crore in FY24.
This improvement can be attributed to the company’s efforts to control costs across various areas, such as employee benefits, logistics and packaging, outsourced manpower, and legal and professional expenses.
Established in 2016, Udaan serves as a B2B commerce platform that support supply chain and logistics activities for small and medium enterprises in India. It facilitates connections among traders, wholesalers, retailers, and manufacturers through its platform. According to its website, Udaan has a network of over 30 lakh retailers and more than 25,000 sellers spread across over 900 cities.
The cost of materials was the primary expense, accounting for 75.3% of the total costs, increasing by 4.2% to Rs 5,576.8 crore.
This called for the company to cut costs in various areas as employee benefits saw a 35.4% reduction, logistics and packaging saw a 16.8% decrease, outsourced labor saw a 39.3% cut, and legal and professional costs saw an 18.8% reduction.
The company also made share-based payments (ESOP costs) amounting to Rs 307.1 crore. Udaan’s total expenses decreased by 4.4% to Rs 7,407.6 crore in FY24 from Rs 7,750.8 crore in FY23.
The company faced difficulties in raising equity capital, resulting in a significant drop in its valuation from a peak of $3.2 billion to $1.3 billion in December 2023, a decrease of over 59%.
Last week, Udaan secured Rs 300 crore (over $35 million) in debt funding led by Lighthouse Canton, Stride Ventures, InnoVen Capital, and Trifecta Capital. The company has raised around $1.9 billion in debt and equity funding to date.
The EBITDA margin strengthened by 576 basis points to -37.13%. On a unit level, the company spent Rs 1.3 to earn a rupee of operating revenue in FY24.
Overall, Udaan has encountered challenges in scaling its business, with revenue remaining flat and difficulties in raising equity capital. However, the company has managed to control its losses and improve its financial performance through cost-cutting measures.
