Udaan, a business-to-business e-commerce platform, announced a financing round of approximately $160 million on Tuesday. This round includes fresh equity, new debt, and a debt-to-equity conversion, according to the company. Existing shareholders and a new investor will contribute capital, while some investors will convert part of their outstanding bonds into equity. The funding is crucial as Udaan navigates insolvency proceedings involving its offshore parent, Trustroot Internet Pvt. Ltd., based in Singapore.
Financing Details
The financing includes a commitment of about $45 million from an investment management firm through its private credit platform. The company stated that the remaining balance of the convertible bonds will be extended under revised terms. This transaction is subject to customary closing conditions and regulatory approvals. Udaan previously raised $114 million in a Series G funding round, which valued the company at around $1.3 billion, a significant decline from its peak valuation of $3.2 billion.
Background on Insolvency
Udaan's financial struggles have been highlighted by ongoing legal challenges. A group of global creditors has filed a case against Trustroot in the Singapore High Court after the company defaulted on $170 million of compulsorily convertible notes that matured on June 30. Creditors involved include Tor Investment Management and Nomura, among others. The situation underscores the challenges Udaan faces as it seeks to stabilize its operations while addressing its debt obligations.
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The financing round is likely to provide Udaan with necessary liquidity, which could stabilize its operations amid ongoing insolvency issues. However, the company's valuation decline may affect investor sentiment in the broader e-commerce sector. Investors will watch for updates on Udaan's restructuring efforts and the outcome of the insolvency proceedings involving Trustroot.