UK’s Prudential may lead Udaan downround; below $2 billion value seen

economictimes.indiatimes.com:

Prudential is in talks with Udaan to lead a fresh round of equity funding in the business-to-business ecommerce startup, which over the past year or so has scaled down its operations significantly.

The Lightspeed India-backed startup is likely to see a significant drop in its valuation, to under $2 billion during the new financing round compared with its last peak valuation of $3.2 billion, said people aware of the contours of the deal being discussed.

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The fresh investment is expected to be in the range of $100-150 million, the people said. M&G Prudential is currently conducting due diligence before closing the deal, they added.

While new investment is coming in, M&G Prudential and others who had invested in the firm last year through convertible notes will also fully convert the debt into equity in this round, the people said. Udaan was among the first set of companies to have tapped convertible notes to safeguard their valuation when a funding winter had started to set in India.


When a funding happens through this instrument, there is no valuation ascribed to the company. These investors will get to convert their notes into equity — typically at a discount — in the next liquidity event like a funding round or an initial public offering.

“They (Udaan) have about $300 million of convertible notes and that is fully getting converted in this round. M&G Prudential is likely to lead new equity as well, but valuation would be