Indian B2B e-commerce platform Udaan is in advanced discussions to raise between $50 million and $60 million from existing investors, according to a report by The Economic Times titled “Udaan in talks to raise $50-60 million from existing backers Lightspeed, M&G; sources.”
The funding round, if completed, would come amid a prolonged funding slowdown in India’s startup ecosystem, particularly affecting late-stage companies that are increasingly turning to insider rounds to shore up liquidity and sustain operations. Lightspeed Venture Partners, one of Udaan’s earliest and most prominent backers, is expected to participate alongside UK-based investment firm M&G Investments, reflecting continued support from existing stakeholders rather than the onboarding of new investors.
Udaan, once one of India’s fastest-growing startups, has been navigating a difficult operating environment marked by reduced valuations, tighter capital availability, and intensifying pressure to improve unit economics. The company, which connects manufacturers, wholesalers, and retailers through its digital marketplace, has in recent years shifted its strategy toward cost optimization, supply chain efficiency, and profitability.
The reported funding talks follow a series of internal restructuring measures at Udaan, including layoffs, business vertical consolidation, and a sharper focus on core categories such as FMCG and staples. The company has also streamlined its logistics arm and pulled back from less profitable segments as it works to stabilize its balance sheet.
The Economic Times report indicates that this new capital infusion is likely intended to strengthen Udaan’s working capital position and support its path to sustainable growth rather than aggressive expansion. Like many peers in the Indian startup ecosystem, Udaan has been recalibrating its ambitions in response to investor demands for financial discipline and clearer monetization strategies.
Founded in 2016 by former Flipkart executives, Udaan was once valued at around $3 billion and counted among India’s most prominent unicorns. However, market conditions over the past two years have led to markdowns in startup valuations across the board, and companies such as Udaan have faced growing scrutiny over burn rates and long-term viability.
The potential backing from existing investors suggests a degree of confidence in the company’s restructuring efforts, even as questions linger over its ability to achieve profitability in a competitive and margin-sensitive segment. The B2B e-commerce space in India remains crowded, with multiple players competing for a fragmented base of small retailers and distributors.
While the outcome of the funding discussions is not yet finalized, the development underscores a broader trend in India’s startup financing landscape, where follow-on investments from current backers are increasingly replacing large, headline-grabbing funding rounds led by new investors. For Udaan, securing this capital may provide a crucial runway as it continues its transition from rapid expansion to operational sustainability.
