Bengaluru, 18 February (IANS). Beatuby e-commerce platform ‘Udaan’ is facing serious financial challenges despite obtaining fresh funds as the company’s revenue remained almost stable in FY 2024.
According to the company’s financial data, its evaluation also declined by 59.3 percent to $ 1.3 billion, below its $ 3.2 billion peak.
This decline has come when ‘Udaan’ has cut its losses by 19.4 percent in a year.
In FY 2024, GMV of ‘Udaan’ saw an increase of only 1.7 percent, which increased from Rs 5,609.3 crore in the previous financial year to Rs 5,706.6 crore. This is a major setback for the company, as its GMV was more than Rs 9,900 crore in FY 2022.
The company based in Bengaluru mainly earns revenue from business goods sales, platform fees, logistics services, credit services and advertisements.
However, the sale of business goods is 98.5 percent of its GMV, which reflects heavy dependence on this revenue stream.
Despite the stable revenue, ‘Udaan’ is aggressively cutting the cost to manage its finance.
The company reduced the expenditure in major areas, including employee benefits, which was 35.4 percent lower, logistics and packaging declined by 16.8 percent and outsource manpower fell by 39.3 percent.
This cost-katauti helped in the financial year 2024 reduce the total expenditure to Rs 7,407.6 crore.
However, the cost of material – the biggest expenditure for the company – 4.2 percent increased to Rs 5,576.8 crore.
According to ‘Udaan’ financial data, its deficit declined from Rs 2,075.9 crore to Rs 1,674.1 crore.
In an attempt to continue operations, ‘Udaan’ has recently raised a date funding of Rs 300 crore (more than $ 35 million) from investors such as Lighthouse Canton, Struad Ventures, Innole Capital and Trifacta Capital.
The company has so far raised about $ 1.9 billion in date and equity funding. However, the report states that the company may soon need another round of funding.
The firm has succeeded in improving its EBITDA margin and operational cash flow in FY 2024.
-IANS
SKT/ABM
