Indian e-commerce startup Udaan is diligently preparing for its scheduled 2025 IPO by prioritizing cost reduction and forging strategic partnerships with consumer brands. CEO Vaibhav Gupta is resolutely committed to achieving operational profitability within the next 18 months, aligning it with the company's upcoming public offering. In the fierce competition against industry heavyweights like Reliance Industries Ltd. and Walmart Inc.'s Flipkart, Udaan aspires to become the preferred platform for small-scale merchants in need of a diverse range of products. According to Gupta, the company's primary focus lies in maintaining consistent and predictable financial performance, along with ensuring a strong market presence.

Udaan, supported by Lightspeed Venture Partners, is among the cohort of Indian startups seeking to leverage the country's expanding economy while also meeting investor demands for profitability. In the previous year, the company, following a trend seen in many Indian startups, optimized its operations by downsizing its workforce and enhancing internal oversight and compliance measures. Presently, Udaan maintains an employee count of approximately 1,800. Gupta stressed the significance of shifting towards a more professionalized management structure, establishing a professional board, and having institutionalized shareholders as the company readies itself for the transition to the public markets.

Regarding its IPO listing, Udaan has not yet made a decision on whether it will opt for a domestic or international public offering. In 2021, the company was valued at more than $3 billion, and discussions were underway about securing $400 million in funding. Lightspeed Venture Partners holds a 35% stake in Udaan, while Tencent Holdings Ltd. has a 6% ownership in the company. Founded in 2016 by three engineers with prior experience at Flipkart, Udaan's online marketplace and logistics networks play a pivotal role in facilitating faster deliveries for small retailers and eliminating traditional intermediaries. Although this digitally-driven wholesale business currently represents a relatively modest portion of India's retail sector, it carries the potential to expand to $150 billion in sales and deliver a 100% return on invested capital over a decade, as estimated by McKinsey & Co.

Furthermore, Udaan has expanded its horizons into the realm of financing via its fintech division, extending working capital loans to retailers for procuring inventory. This financial aspect of their business is already showing profitability prior to taxes and is witnessing a robust annual growth rate of 70%, as reported by Gupta. Udaan's multifaceted strategy, which encompasses e-commerce, logistics, and fintech, is geared toward revolutionizing and simplifying trade within India. As the company proceeds along its journey towards the public markets, it retains a pivotal position within India's thriving startup ecosystem.