The Bengaluru-based company had closed a $114 million funding round last June led by the two investors. The new round is being negotiated at a flat valuation of $1.8 billion and could be Udaan’s last private capital raise before it targets an initial public offering (IPO), one of the people said.
“In fiscal 2025, the company had reduced Ebitda burn by 40% and it has gone down further in FY26. Udaan is now targeting net profitability in the next 15-18 months. It will go ahead with plans for an IPO once it achieves profitability,” the person said.
“For the month of March 2026, the burn has almost halved,” the person added.
The fundraising discussions come at a time when several new-age B2B companies are preparing to tap public markets. Lightspeed-backed Zetwerk and Accel-backed Infra.Market have already filed confidential papers for their IPOs.
The fresh capital will be deployed towards strengthening Udaan’s supply chain network and expanding its go-to-market capabilities, another person said. The B2B ecommerce company operates across categories such as FMCG, staples, fruits and vegetables, and pharmaceuticals. It procures products in bulk and supplies them to kirana stores and small retailers. Udaan currently operates more than 25 warehouses across 16 cities and serves a network of over 200,000 retail outlets, which it now plans to expand further.
Udaan and M&G declined to comment on the story. Lightspeed did not respond to ET’s email.
Separately, the company has begun the process of shifting its domicile back to India from Singapore, ET reported in March, citing cofounder and chief executive Vaibhav Gupta.
Founded in 2016 by former Flipkart executives Gupta, Sujeet Kumar and Amod Malviya, Udaan has seen two of its cofounders step away from day-to-day operations over the past four years. Kumar remains on the board, while Malviya has launched Pre6, an AI-powered manufacturing company.
Udaan’s revenue declined from a peak of Rs 10,000 crore in fiscal 2022 to around Rs 4,561 crore in FY25. As the company scaled down operations, losses narrowed 37% year-on-year to Rs 1,055 crore in FY25. Udaan is yet to file its FY26 financial statements.
Revenue contracted after the company exited certain non-essential categories such as lifestyle, general merchandise, and home and kitchen products, while sharpening its focus on grocery and essential categories.
The reduction in scale also resulted in reduction of Udaan’s valuation, which has fallen from its peak of $3.2 billion in 2021.