Udaan is a B2B trade marketplace that is specially designed to empower, retailers, wholesalers, traders, and manufacturers using technology as a source. A startup has to be valued at $1 billion or above if a privately held startup wishes to be in the unicorn club. Udaan was founded in the year 2016 by the former employees of the Ex-Flipkart. Amod Malviya, Vaibhav Gupta, and Sujeet Kumar are the trio who founded Udaan. The main idea was to connect wholesalers, traders, retailers, and manufacturers on a single platform via a mobile app.
The Udaan app enables users to access real insights into active trends and many other premium B2B trade features. Udaan is run by Hiveloop Technology Pvt. Ltd.
We often hear the term Unicorn Club when associated with Udaan, What does Unicorn club mean? A unicorn is a term in the business world to indicate a privately held startup company valued at over $1 billion. Decacorn is a word used for those companies over $10 billion, while hectocorn is used for such a company valued over $100 billion. According to CB Insights, there are over 450 unicorns as of October 2020.
How did Udaan start?
A startup has to be valued at $1 billion or above if a privately held startup wishes to be within the unicorn club. Udaan has recently entered into the Unicorn club. We will be talking about the expansion and also its secrets but before allow us to first discuss the initial days of the Unicorn startup – Udaan.com Udaan was founded within the year 2016 by the previous employees of the Ex-Flipkart. Amod Malviya, Vaibhav Gupta, and Sujeet Kumar are that the trio who founded Udaan. We will be talking more about the founders and their contributions further within the blog. Initially, Udaan was started only as a logistic platform for small buyers and sellers in electronics, staples, and apparel. At that time they only focused on logistics for approx. 8 to 10 months. They got much exposure within India which was very significant for the startup at that time. During those days, Udaan has built an infinite data database of buyers and sellers before they stepped into the supply business. Also, Very soon Udaan is eyeing to become a lending platform for merchants. Udaan is trying to form a full-stack platform for little and mid-sized enterprises which is in a position to be the mixture of a marketplace, logistics, and lending.
Let’s go into details of Udaan’s Business Plan.
In simple terms, Udaan made life easier for a lot of people. They do not believe in owning assets and also are not planning to go asset-heavy as of now. Udaan is a Business to Business Marketplace where the producers (manufactures and wholesalers) can sell their products to retailers and buyers through an online portal or mobile app which udaan.com. Anybody and everybody can access it. Not only that the company provides logistics/ transportation, secure payments, keeps financial details safe, and does technical support too.
The company also offers accounting, order management, and payment management solutions to merchants on its platform.
The Promoters of the company found that financing working capital has been a major headache for end retailers.
The retailers end up borrowing from local lenders who charge exorbitantly. Udaan intends to provide working capital(funds) to them at a reasonable rate.
So, apart from being a platform for retailers and wholesalers, it has also
started underwriting loans for these small businesses.
It has also received a non-banking financial company (NBFC) license to provide finances to SMEs.
The target that Udaan is trying to achieve is to get the best prices. Udaan wants to solve the credit underwriting problem, B2B logistics, payment and sales, and marketing. The ultimate goal will be to benefit both customer and the retailer.
How does the company earn?
Going by the reports, there are 50 Million SME(Small and medium enterprises) in India and the total number of transactions that take place across these segments has crossed 600 billion. Udaan charges for its services. We understand that Udaan is a combination of the marketplace, logistics, and lending.
They provide a credit limit to the only verified buyer that too if is eligible for the limit.
At first, they will provide Rs. 10000/- credit with no interest charges then the credit limit will be increased to a maximum of Rs. 250000/-.
Udaan Mobile app has approx. 22,657 monthly downloads and is increasing with a growth of 42.98% every month.
Udaan’s official website is Udaan.com which is ranked 36,420 among websites globally based on its 1,277,588 monthly web visitors.
At the moment, Udaan doesn’t intend to make money through providing funds for working capital for its buyers so they do not charge any interest on the credit.
Udaan showed its individuality by becoming a unicorn with the capital infusion of around $225 million from its existing investors — DST Global and Lightspeed Venture Partners.
The Tough Road
When starting a new company, everyone faces challenges and that is just a journey that the company goes through, Udaan had its moments too. Confusion, getting to know the market, and so on. Starting a new company with his co-founders Vaibhav Gupta and Amod Malviya in the uncharted B2B space was a huge challenge for all. “We started our journey together and the investment started coming in, we started seeing growth, capital looking more real. The model had great potential. We had to solve the B2B problem from the supply chain angle. Internet penetration was not there, so goods dealers were not using the internet. But data now has gone to the village level, with people using WhatsApp.The timing worked for us,” Sachin Bansal said. They had to design the supply chain systems and processes. Also, the execution of the operations will always be a challenge for Udaan which is to be dealt with as it grows bigger.
Step by Step
The Udaan co-founder explained how he and his other co-founders set the stage for the Bengaluru-based B2B e-commerce platform to grow. “In 2016, for the first six months – we just analyzed the market. Went on the ground, spoke to retailers, suppliers, and tried to understand their roles. We launched our beta in November 2016 after all the research. For seven months – it was used by all our retailers, manufacturers, and then a year later in 2017, we started our company,” Sachin Bansal added.
What keeps them going?
Co-founder Vaibhav Gupta said when asked about team, “It’s definitely by choice. Because we believe if things are working, then we should not unnecessarily be changing it. We have a strong team working with us where we are able to decentralize a lot of decision making.” He adds that there is power in multiple intuitions working together, and that is working in Udaan. Talking about the power of decentralization in an interview, Amod Malviya says, “There are a lot of companies who are far more mindful of the power of decentralization. We look at most things on a first-person basis and a need basis. We actually don’t have titles across the organization. There is a power that we have sensed that comes from focusing only on the merit of the discussion and not the title of the person who is talking.” According to Amod, not having any of these designations at Udaan is a hugely freeing concept. “The only real thing that matters is what is the benefit we are actually creating for our users,” he says. Sign up for our exclusive newsletters. Subscribe to check out our popular newsletters. Shradha Sharma in conversation with (from left) Vaibhav Gupta, Amod Malviya, Sujeet Kumar. Vaibhav adds that there is a good and a bad side to everything. And having a CEO doesn’t solve everything, but might actually create its own issues. He says, “When we started Udaan, we were very clear that we are going to go after a very big problem and build out a great product and a great service, scale it, and win the market.”