Last updated on July 16th, 2020 at 03:59 am
Let’s discuss the business model of Udaan. Udaan is one of the fastest-growing startups in India. They have crossed a $1 billion dollar valuation in 26 months and have become a unicorn club.
If you are from clothing, footwear, FMCG, Electronics and Food wholesale or retail sector then it’s more chances to hear the name of Udaan many times.
Are going to start a new startup? then this case study or business model of Udaan will open your idea box. You will know how people think about innovative ideas and apply them at the right time with proper planning.
Overview Of Udaan.com
Udaan is specially focused on empowering retailers, wholesalers, traders and manufacturers with the help of technology.
Udaan is designed to operate on B2B (Business to Business), Business Development, an E-commerce marketplace that easies the supply chain and empowers business. Hiveloop Technology Pvt. Ltd is the legal name of Udaan.
The main focus of Udaan is to connect Retailers, Traders, Wholesalers and Manufacturer in a single frame with the help of a mobile app and empower them.
Udaan is the best platform for small and medium businesses to scale and nature their business with the help of Udaan App and their many facilities such as doorstep delivery, smart return, credit facility, easy payment option and many more.
Udaan Was Founded in the year of 2016 by Amod Malviya, Vaibhav Gupta, Sujeet Kumar, a former employee of Flipkart. The major success reason of Udaan is totally on the team of these three IITian.
Yes, they passed out from IIT and worked in Flipkart in a different sector. So, let’s know about what they did on Flipkart. Vaibhav Gupta was a senior vice president in finance and Analytics.
Amod Malviya was a Flipkart CTO (chief technology officer) till July 2015.
Sujeet Kumar built Flipkart’s operations and logistics unit and this man worked on Ekart and WS retail and also he played a major role to expand Flipkart in many cities with the help of logistic supply chain.
Firstly Udaan was started as a logistic supply platform for small scale business buyer and sellers for electronics, apparels and staple.
Udaan was mainly focused on logistics for around 8 to 10 months and they achieved a very good response within India and gave a kick to expand their startup.
Udaan has already built a large number of the database of buyers and sellers before they enter into the supply business and bit by bit they become a leading platform for merchants in a short time.
Business Model Of Udaan In Simple Words
Let’s know about the business model of Udaan.
Udaan is a B2B marketplace where manufacturers and Wholesalers can sell their products easily to retailers with the help of an online platform or a mobile app like the other E-commerce app but the difference is Udaan app connect manufacturer, Wholesalers and retailers in one frame.
They Provide doorstep delivery, credit facility that depends on their term and condition, smart return and easy with secure payment facility.
Udaan always focuses on asset-light based business models. They do not focus on or believe in assets owning.
If you are a retailer and purchasing your goods from a wholesaler it might be possible the wholesaler will bring the customer for you, but Udaan helps business to find out customers, suppliers and king of business which is ‘product’ across categories then connect all to get the best deal.
Udaan always focuses on logistic and secure payment facilities that build the trust of their customers.
Udaan also provides an easy platform to maintain accounting, order management and payment management solutions to their customers that help to remove the headache of their merchant for keeping all data.
This unicorn company also provides a facility for working capital at a reasonable rate to empower their customer business. Udaan has a license of NBFC (Non-Banking Financial Company) to provide finance facility to Small and mid-size enterprises (SMEs).
Udaan Business Model Success
This B2B company is successful because their founder believes to eliminate tech productivity destroyers and allow the engineer to use their creativity.
Another secret for the success of Udaan Business Model is the strong team of Udaan and better understanding between their founders.
Udaan founders were doing amazing in Flipkart and they have already work experience of E-commerce industry that is a key element for Udaan success.
Udaan Future Target
The future plan of Udaan is to the expansion of their services in every city.
Udaan always loves to collaborate with a new idea. Co-founder Vaibhav Gupta said we always continue to focus on adding more buyers, sellers in our platform with the help of core technology and strong management.
Transparency In Pricing
The most important element of any startup is to make sure of transparency in pricing.
We all have heard a one complain from the buyers in the offline wholesale marketplace is that from where do they buy goods at the right price.
It has solved this problem in a better way by displaying price on the platform. Udaan Business Model always focus on fair prices with quality.
Udaan Customer Relationships
CR or Customer Relationship is a key factor for every successful business model.
If we talk about the customer relationship of Udaan with their customer so that is absolutely excellent.
Udaan always makes sure for a mutual understanding relationship with their customer and that’s why Udaan is a strong player in this industry.
Channels mean medium or source through which the company provides its services to its targeted audience.
Udaan channels are Internet, Udaan Application and E-Commerce Portal.
Udaan’s Revenue Model- Medium Of Earning?
As we discussed above Udaan is a combination of a Marketplace, Lending and Logistics.
Udaan always focuses on the logistics part for about 8 to 10 months that helps Udaan to make a healthy relationship with the buying and selling community.
If we talk about how Udaan earns, then the answer is They charge a percentage of commission on sales that depends on the different categories.
They also charged for the delivery of logistics from buyers that also varies according to the quantity of product and category of the product also.
Udaan also provides a credit facility to only their verified buyer and buyer should be eligible for the limit.
Firstly Udaan gives Rs. 10,000/- credit facility with no interest charges then they increased the credit limit up to Rs. 2,50,000/-.
Currently, Udaan doesn’t intend to charge money through providing working capital for their buyer and they are not charging interest on the credit facilities.
7 Round Of Udaan Funding
As we all know Investor’s Interest in the B2B E-commerce company has been continuously increasing day by day and we all know the Udaan team is very fantastic and their founders already have been working in Flipkart and they also pass out from IIT colleges.
This is also the main reason for Udaan to easily get funds from investors and enter into the unicorn club.
Udaan has raised a total of $681.3 M in their 7 funding rounds.
Bangalore based company Udaan started from raising $10M in series A funding on 23 November 2016 and that was led by Lightspeed Venture Partners.
The late funding of Udaan for $300 M in series D on 30 August 2019 and that is led by Altimeter Capital and DST Global. Let’s see all detail of all the funding that the startup has raised with the date:
Some Facts and Figure
Operating Revenue during the Financial year 2019 Udaan spent RS.363 crore and earned Rs.12 crore.
Categories B2B or Business-To-Business
Headquarters Regions Asia- Pacific (APAC)
Founders Amod Malviya, Sujeet Kumar, Vaibhav Gupta
The Founded Year 2016
Funding Status Late Stage Venture
Last Funding Type Series D
Legal Name Hiveloop Technology Pvt. Ltd.
Employees 4,500-5,024 (march 2020)
Hub Tag Unicorn
IPO Status Private
Mobile App Approx. 22,657 monthly download
Digital Platform Links Of Udaan
Facebook view on Facebook
LinkedIn view on LinkedIn
Twitter view on twitter
Contact Email [email protected]
Let’s Talk About Top Competitors Of Udaan
ZoomTail: ZoomTail is one of the top competitors of Udaan. ZoomTail is also a Bengaluru-based company. ZoomTails Technologies Pvt. Ltd offers its e-commerce services to fashion retailers and this is the largest B2B e-Commerce platform for fashion consumer goods.
Big Trade: Big Trade was founded in the year of 2017 and one of the top competitors of Udaan. Big Trade headquarters also in Bangalore.
Tradekosh: This company is based on Pune and founded in the year of 2018. Tradekosh is the 3rd rival of Udaan in B2B e-commerce.
The business model of Udaan amid increased demands in Coronavirus Lockdown 2020
Udaan is working in 30 cities across 21 states in India and they supply goods to Kirana stores.
In the video interaction for a yourstory Udaan Co-founder Sujeet Kumar Explain how they are tackling delivery challenges at the time when our nation is fighting with COVID-19.
Udaan Business Model Working With Essentials
The business model of Udaan divided into three parts which are food, non-food and pharma but nowadays Udaan are focusing on the delivery of FMCG and pharma products.
The founder of Udaan said they are working with several on-ground challenges because each state and city have many different rules and regulations. He added you need to work locally everywhere.
Working With Government Rules
Udaan is working with government rules and regulations. They are also focusing on local authorities norms for passes and get necessary permits.
Udaan Canned More Than 50% Of Staff
Yes, Unicorn company has canned more than 50% of staff amid Coronavirus lockdown 2020. The reason for the fire is a huge loss during the COVID-19 lockdown phase.
Most of the employee those are fired is from the sales division. Udaan has fired their employee via e-mail and all of the employees who were fired were working an on-roll role.
They tweeted on April 24, the company has fired more than 200 employees from Bengaluru because they need to cost-cutting for the quarter and go ahead and make some revenue.
Conclusion: Udaan Business Model is excellent and profitable. As we know a strong team can do anything in any field and the same thing is happening in Udaan their team is amazing that is a key factor for Udaan success. We can learn many things from the Business model of Udaan and its founder.