In FY23, the company had reported a 40% fall in operating revenue at Rs 5,609 crore while also cutting losses by 33% from FY22.
During the fiscal year ended March 2024, the Lightspeed-backed company cut its staff costs by 35% year-on-year (YoY) to Rs 643 crore.
In December 2023, Udaan had laid off 100-120 employees aiming to cut down on redundancies following a rejig at the company. Prior to that, in 2022, the company had handed pink slips to around 1,000 employees. At the beginning of 2024, Udaan had 1,500 employees on its roll, compared to the peak of 5,000.
It reduced expenses under several other heads as its growth slowed down. The company’s costs on outsourced manpower in FY24 were reduced by almost 40% to Rs 167 crore, while its marketing costs during the year were down to just Rs 9 crore, compared to Rs 40 crore in FY23.
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As a result, the company’s net operating cash outflow improved to Rs 920 crore in FY24, against Rs 1,299 crore in FY23.In September 2023, Udaan had combined its ‘Essentials’ vertical – consisting of fast-moving consumer goods (FMCG), staples and pharmaceutical categories – with its ‘Discretionary’ vertical, which includes general merchandise, lifestyle and electronics categories.
Sale of traded goods was the biggest contributor to Udaan’s topline, making up over 98% of the revenue while income on account of delivery services, advertising revenue and business support service fees made up for the rest.
In FY24, the company’s smaller income streams including selling and distribution revenue, and platform fee reported nil revenue. In FY23, Udaan reported making Rs 84 crore from selling and distribution revenue.
Udaan was founded by former Flipkart executives Vaibhav Gupta, Sujeet Kumar and Amod Malviya in 2016. For more than two years now, Kumar and Malviya have kept away from the company’s operations but continue to hold board positions.
ET reported last month that UK savings and investment firm M&G Prudential is in discussions to lead a new funding round of $80-100 million for Udaan. The company, which saw a 44% cut in valuation at around $1.8 billion last year, may see the latest round at the same flat valuation.
“Our solid operational performance this year stems from the strategic business reorganisation initiated 8-9 quarters back and disciplined cost optimisation initiatives, leveraging synergies to fuel sustainable growth while maximising efficiency. A 35% reduction in SG&A (selling, general, and administrative) expenses exemplifies the operating leverage embedded in our new, robust playbook model,” Kiran Thadimarri, Udaan’s senior vice president of finance, wrote in a LinkedIn post.
“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,” he wrote.
“Most notably, during the period the company achieved a 30% reduction in absolute Ebitda burn, underscoring the consistent focus on driving sustainable growth through efficiency enhancement and superior execution,” he added.