bound Udaan to kickstart reverse flip to India in weeks: CEO Vaibhav Gupta

Synopsis

B2B ecommerce firm Udaan plans to shift its headquarters from Singapore to India as part of a reverse merger, aiming for an IPO within 9–18 months. After scaling back operations to focus on essentials, groceries, and Horeca360, the company has cut losses and narrowed its footprint from 80 to 16 cities, serving 200,000 shops.

Business-to-business ecommerce company Udaan will likely start the process to move its domicile from Singapore to India in the next few weeks, cofounder and chief executive Vaibhav Gupta told ET.

The Lightspeed-backed company secured the National Company Law Tribunal’s approval last year to consolidate its technology, logistics and wholesale trading units under a single entity, Hiveloop Ecommerce. After a reverse merger of its Singapore-based holding company with the Indian entity, the latter will become the parent firm.

The reverse flip is one of the key steps for its initial public offering, Gupta said. Another consideration is Udaan’s profitability profile.

“There are two workstreams. First, getting the business to break even, which we expect by mid-next year. Second is the (IPO) process. We consolidated our business units in India last year. Now we are working on the Singapore-to-India reverse merger,” said Gupta. “The IPO timeline is likely nine to 18 months away, depending on how fast these processes move.”

The Bengaluru-based company’s revenue fell from a peak of Rs 10,000 crore in fiscal 2022 to around Rs 4,561 crore in FY25. As operations scaled down, its loss narrowed—by 37% from FY24 to Rs 1,055 crore.

Revenue shrank on account of it exiting certain verticals in non-essential categories such as lifestyle, general merchandise, and home and kitchen, while increasing focus on groceries and essential items, according to the company.

“We reset the base from 80 cities to 16 (between FY24 and FY26) to improve profitability,” said Gupta. At its peak in 2021-22, Udaan operated in more than 1,000 cities across India.

Udaan’s valuation has also nosedived as the business has shrunk. It raised $114 million from existing investors M&G Prudential (UK) and Lightspeed Venture Partners last June at a flat valuation of $1.8 billion. Per Tracxn, the company has raised nearly $2 billion across multiple debt and equity rounds. Its peak valuation was $3.2 billion, in 2021.

Taking on Eternal’s B2B grocery supply unit Hyperpure, Udaan launched a new vertical, Horeca360, in 2025 to service hotels, restaurants and caterers in Bengaluru. This now contributes about 15% to its total revenue from the city.

Under Horeca360, it offers groceries, vegetables, fruits, dairy products and meat, and services 7,000-8,000 small, medium and large food businesses, the company said.

Business dynamics

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 holds a board position, while Malviya has started Pre6, an AI-powered manufacturing firm.

The B2B ecommerce player operates across categories like FMCG, staples, fruits & vegetables and pharma. It buys items in bulk and sells to kiranas and small retailers. Currently, it has 25 warehouses in 16 cities and supplies to a network of 200,000 shops.

“If you look at India’s consumption as a triangle, there is the affluent, the middle-class and the masses. Most of modern trade and quick commerce focusses on the top. The mass market households with less than Rs 10 lakh income is the market for us. This is where the kirana stores are,” Gupta said.

After ecommerce, the expansion of quick commerce is said to have impacted kirana stores, at least in the top eight to 10 cities where the likes of Blinkit, Instamart and Zepto are popular.

“This (mass) market is driven by low AOVs (average order value), low margins, unbranded loose staples and entry-level price points like Re 1 or Rs 2 sachets. Quick commerce math doesn’t work here,” Gupta said.

Rural commerce, as a space, has been picking up investor interest over the past year with multiple startups attracting risk capital. Rozana, which has built an omnichannel retail network spanning 21,000 villages in Uttar Pradesh and Haryana, raised $30 million this month in a funding round led by existing investors Bertelsmann India Investments and Fireside Ventures.

Value retailer SuperK raised Rs 100 crore last July from Flipkart cofounder Binny Bansal’s 3State Ventures and CaratLane founder Mithun Sacheti.

In May, TPG NewQuest and A91 Partners-backed value fashion retailer CityKart raised Rs 538 crore. Franchisee-led grocery startup Apna Mart, which focuses on tier-II towns and below, raised $25 million in a mix of equity and debt from Nandan Nilekani’s Fundamentum, and VC firms Accel, Peak XV Partners, and Sparrow Capital in March.

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