Revenues had declined 20% in FY25, following a marginal 1% increase in FY24 and a 40% plunge in FY23. Udaan also cut its net loss by 19% to Rs 850 crore in FY26.
Udaan has shifted to a cluster-led operating model with greater accountability for performance at the city and category levels, according to Vishnu Menon, the company’s senior vice president, strategy and business finance. The approach marks a move away from expanding across markets towards improving efficiency and profitability in existing ones, he said.
“We are also seeing this shift in our revenue mix. Private labels now contribute approximately 15-25% of staples sales across operating cities, helping improve margins, increase wallet share, and drive greater value from our existing sourcing and distribution infrastructure,” Menon wrote in a LinkedIn post. Bengaluru, its largest market, has also turned Ebitda positive, according to the company.
Under the new model, Udaan is now targeting smaller, high-density clusters across individual pin codes or groups of pin codes to maximise buyer penetration, instead of focussing on larger geographical market segments.
In July this year, Udaan closed a $160-million recapitalisation exercise that saw the company raise funds in a mix of fresh equity, debt, and conversion of debt into equity. This included $45 million in private credit from US-based asset management firm BlackRock.
The Lightspeed-backed company has also been active in making acquisitions.
In September, Udaan said it was acquiring Lynk Logistics, a retail distribution firm owned by food and grocery delivery platform Swiggy. The deal valued Lynk Logistics at Rs 500 crore, and Swiggy will take a 2.8% stake in Udaan as part of the transaction. Additionally, Swiggy also invested Rs 75 crore in Udaan for another 0.4% stake.
Prior to this in July 2024, Udaan picked up a 100% stake in InfoEdge-backed retail tech startup ShopKirana in an all-stock deal. At the time, Udaan cofounder and chief executive Vaibhav Gupta had called the acquisition “a strategic milestone in our journey to the IPO and beyond”.
Udaan was founded by former Flipkart executives Gupta, Sujeet Kumar, and Amod Malviya in 2016. For almost four years now, Kumar and Malviya have kept away from the company’s operations. Kumar continues to hold a board position, while Malviya has started a new venture in the AI manufacturing space.