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Economic Times
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Udaan logs lower net loss, flat operating revenue in FY24
- Udaan, the business-to-business ecommerce platform from India has posted flat revenues despite a restructuring effort to cut losses. This year’s revenue of Rs 5,707 crore is about the same as the previous year, while net loss for FY24 reduced by nearly a fifth to Rs 1,674 crore YoY. It cut costs by 35% YoY on staff, 40% on outsourced manpower to Rs 167 crore, and marketing costs by over three-quarters to just Rs 9 crore YoY.
- Udaan CEO’s said the firm is on track to profitability as it 'achieved a 30% reduction in absolute Ebitda burn' with 'disciplined cost optimisation initiatives' given the '35% reduction in SG&A expenses' in the firm's 'robust playbook model'.
- Essentials' vertical, a combination of FMCG, staples and pharmaceutical categories, and 'Discretionary' vertical, mainly general merchandise, lifestyle and electronics made up the majority of the company’s topline with sales of traded goods accounting for over 98% of its revenue. The smaller income streams recorded nil revenue in FY24, including 'selling and distribution revenue, and platform fee' that had continued into FY23.
- UK investment firm, M&G Prudential plans to invest $80-100 million in Udaan alongside existing investors including Lightspeed Venture Partners, DST Global and Tencent. Udaan's valuation saw a 44% drop to $1.8bn last year, indicating the possibility of funds being offered at the flat valuation.
- The company’s founders have kept away from its operations for over two years now but still hold board positions. It was founded in 2016 by Vaibhav Gupta, Sujeet Kumar, and Amod Malviya, three former executives from Flipkart.
- The company improved its net operating cash outflow to Rs 920 crore in FY24, against Rs 1,299 crore in FY23.
- Sale of traded goods was the biggest contributor to Udaan's revenue in FY24 as it made over 98% of revenue with income on account of delivery services, advertising revenue and business support service fees accounting for the rest.
- Udaan had laid off 1,200 employees in 2022 and in December 2023 had laid off 100-120 employees aiming to reduce redundancies.
- In September 2023, Udaan combined its Essentials vertical with its Discretionary vertical.
- Kiran Thadimarri, Udaan's senior vice president of finance, wrote on LinkedIn that the company is “on track to achieving profitability, with an impressive 60% revenue growth and over a 50% increase in daily transacting buyers, driving deeper market penetration and increasing wallet share among retailers”.
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