Bengaluru-based B2B e-commerce platform Udaan saw minimal growth in FY24, with gross merchandise value (GMV) rising 1.7% to Rs 5,706.6 crore from Rs 5,609.3 crore in FY23, according to filings by group entity Trustroot Internet in Singapore. For context, Udaan’s GMV was Rs 9,900 crore in FY22, indicating a deceleration in growth over the past two years.
However, the company reported a 19.4% reduction in net losses, bringing them down to Rs 1,674.1 crore in FY24 from Rs 2,075.9 crore in the previous fiscal year. In total, Udaan’s expenses decreased by 4.4% to Rs 7,407.6 crore in FY24, down from Rs 7,750.8 crore in FY23. This is despite material costs, which comprised 75.3% of total expenses, rising 4.2% to Rs 5,576.8 crore, during the fiscal. Employee benefits were reduced by 35.4%, logistics and packaging costs by 16.8%, outsourced manpower expenses by 39.3%, and legal and professional costs by 18.8%. ESOP costs during the fiscal year amounted to Rs 307.1 crore.
“Our solid operational performance this year stems from the strategic business reorganisation initiated 8-9 quarters back and disciplined cost optimisation initiatives,” said Kiran Thadimarri, SVP Finance at Udaan, in a post on LinkedIn. He added that the firm’s EBITDA burn was reduced by 40% year-on-year to approximately Rs 900 crore. In addition to cost-cutting, Thadimarri pointed to improvements in key operational metrics. As of the current calendar year (YTD in CY24), Udaan’s revenue has grown by 60%, driven by a 50% increase in daily transacting buyers, while monthly repeat rates among customers exceeded 90%, he added. Both contribution and gross margins improved by 300 and 200 basis points, respectively, and buyer wallet share rose by 20%, Thadimarri added. “These metrics reflect the strength of our customer engagement and market penetration,” he noted.
Last month, Udaan raised around $35 million in debt funding from Lighthouse Canton, Stride Ventures, InnoVen Capital, and Trifecta Capital. This adds to a $340 million equity raise in December 2023. So far, the startup has raised a total of around $1.88 billion. Its valuation has dropped from a peak of $3.2 billion in April 2021, to $1.8 billion in January this year, according to Tracxn.
In August, Vignesh Ramakrishnan, Udaan’s business/category head, told Financial Express that the company’s ‘Project Iota,’ designed to curb cash burn and enhance profitability, had delivered a 50-55% year-on-year growth in its overall food business for the first half of 2024. Ramakrishnan noted a 40% expansion in buyer base, attributing the success to Udaan’s micro-market approach, which segments cities into 2-3 km clusters, focusing on key clusters while scaling back in non-core segments like fashion and electronics. “We’ve essentially done a bunch of structural interventions, meeting both sides of the ecosystem – the demand side with kiranas and retailers, and the supply side which includes big brands, small brands, big millers, farmers, and others,” Ramakrishnan had said.
From: financialexpress
Financial News
