Business-to-business (B2B) e-Commerce organization, Udaan has announced that it has raised $280 million from new investors Moonstone Capital Partners and Octahedron Capital, besides existing investors Lightspeed Venture Partners, DST Global, GGV Capital, Altimeter Capital and Tencent Holdings. The funding round valued it at a shade over $3 billion.

Udaan had raised $585 million from a clutch of investors in October 2019, valuing the e-commerce B2B firm at $2.5-2.8 billion. Udaan was founded in 2016 and turned into a unicorn within two years. The current fund-raise is a follow-on round from the 2019 round and with this, Udaan has raised about $1.15 billion so far.

The company will invest in expanding products and categories on its platform, improve user experience, enhance technology and help small and medium enterprises develop financing capabilities, and reinforce supply-chain infrastructure

Udaan said it will use the funds for creating a B2B e-Commerce market in India and reach out to more small businesses. The company will invest in expanding products and categories on its platform, improve user experience, enhance technology and help small and medium enterprises develop financing capabilities, and reinforce supply-chain infrastructure.

The fund-raise comes at a time when e-commerce majors like Walmart-owned Flipkart, Amazon and Reliance JioMart are digitizing kiranas and MSMEs, and boosting their B2B play to take advantage of India’s consumer base. Flipkart launched its digital B2B marketplace Flipkart Wholesale last September.

Online B2B platforms have witnessed rapid growth in recent years but still form a minuscule part of the market. However, the covid-19 crisis saw retailers and brands moving to B2B platforms, where orders could be placed regardless of lockdowns, and they offered demand predictability and an assurance of delivery of goods across cities and states. Udaan’s food category in B2B e-commerce soared last year, with transaction volumes crossing 8,000 tonnes per day. Its foods business, which constitutes around 60 percent of its business, comprises fast-moving consumer goods (FMCG), staples and fresh products.

Udaan has witnessed over 500 percent in volume for the food business in the last two years, with the vertical adding over 50 percent buyers in the in the past six months during the pandemic. It has also witnessed a significant increase in repeat purchase from these buyers.