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Business-to-business (B2B) ecommerce company Udaan continued reducing its losses during fiscal year 2025 even as the tightening of operations impacted its scale. According to regulatory filings in Singapore, where the startup is domiciled, Udaan reported a 37% decline in net loss to Rs 1,055 crore. Its operating revenue fell 20% in FY25 to Rs 4,561 crore.
The company said that the revenue contraction happened on account of it exiting certain verticals in the non-essentials categories such as lifestyle, general merchandise, home and kitchen while increasing focus on groceries and essential items.
Udaan had raised $114-million in funding from existing investors M&G Prudential (UK) and Lightspeed Venture Partners in June at a flat valuation of $1.8 billion.
The company had said that it would be deploying this capital to deepen its presence across key categories, including the fast-moving consumer goods (FMCG) and hotel, restaurant, and café (HoReCa) segments. Udaan also plans to expand its private label brands, especially in the staples category.
Overall, the Bengaluru-based company brought down most of its expenditure during the year. This includes staff costs, which fell 22% during FY25 to Rs 500 crore. Udaan’s finance costs, or expenses incurred on interest payments, also halved to Rs 185 crore.
The company’s other expenses, including costs on account of logistics, marketing, legal fees and outsourced manpower, also fell to Rs 545 crore in FY25 against Rs 724 crore in FY24.
“Following a well-planned and carefully executed restructuring exercise that started six quarters back, Udaan underwent full transition to a cluster based operating model in FY24-25, which made it highly efficient. As part of its long-term vision, Udaan is focused on driving ‘consistent growth with profitability at scale’ by following a regional cluster-led operating model…,” Vishnu Menon, Udaan’s senior vice president-business finance, wrote in a LinkedIn post.
Under the new model, Udaan is now targeting high-density, smaller clusters across individual pin codes or groups of pin codes to maximise buyer penetration instead of focusing on larger geographical market segments.
Menon said that the transition pushed all operating clusters into contribution-margin positivity. The company saw roughly 20% growth in wallet share, a 25% rise in the average number of products bought per retailer, and a similar increase in average order value, he said.
Operationally, he added that the company cut core Ebitda burn by about 40%, underscoring tighter cost controls and efficiency gains.
The company’s continuing business posted around 35% growth in revenue run rate, pointing to sustained momentum and healthy demand across its core segments.
Last July, Udaan announced it was acquiring a 100% stake in InfoEdge-backed retail tech startup ShopKirana in an all-stock deal. At the time, Udaan cofounder and chief executive Vaibhav Gupta had said the acquisition “is a strategic milestone in our journey to the IPO and beyond”.
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 continues to hold a board position, while Malviya has started a new venture in the AI manufacturing space.
In his LinkedIn post, Menon also wrote that Udaan had received approval from the National Company Law Tribunal (NCLT) earlier this year for consolidation of its multiple business entities into an integrated structure, significantly simplifying operations and creating higher efficiencies. “The consolidation approval is a critical enabler in Udaan’s roadmap towards public listing…,” he added.