B2B ecommerce unicorn Udaan has announced a $160 million financing round aimed at strengthening its balance sheet and simplifying its capital structure. The transaction includes fresh equity, new debt, and debt-to-equity conversion, with participation from existing investors and a new investor. This move comes amid insolvency proceedings initiated against Udaan's Singapore-based parent entity after a default on $170 million of compulsorily convertible notes, according to inc42.com.
The financing round involves a mix of capital instruments: some existing bondholders will convert part of their debt into equity, while the remaining bonds will be extended under revised terms. A leading global investment management firm has committed approximately $45 million through its private credit platform as part of the transaction. Udaan has not disclosed the full list of investors or the timeline for closing the round. The company stated that the insolvency proceedings affect only the offshore holding company and will not impact its India operations, per inc42.com.
This financing is critical for Udaan as it seeks to resolve its debt overhang and stabilize operations. The company had defaulted on convertible notes maturing on June 30, prompting creditors to reject its debt restructuring proposal and initiate legal action. The fresh capital injection and debt restructuring efforts are intended to address these financial challenges and support Udaan’s ongoing business in the competitive B2B ecommerce sector. The deal follows a trend of startups restructuring debt amid tightening credit conditions, according to inc42.com.
Udaan’s creditors initiated insolvency proceedings against its Singapore parent entity earlier this month after the default on $170 million of convertible notes. The company confirmed that these proceedings do not affect its India business. The $160 million financing round includes $45 million committed by a global investment firm’s private credit platform, as reported by inc42.com.