Udaan avoids bankruptcy, reaches agreement with offshore creditors to settle $178 million claim

Mumbai: With a little help from BlackRock, the world’s largest asset manager, IPO-bound Udaan has struck a deal with a string of offshore lenders to avoid bankruptcy.

Earlier this week, the internet commerce company reached an agreement to restructure its debt with its shareholders and global creditors who had initiated insolvency proceedings in the Singapore High Court last month, said people in the know. The recast would include upfront cash payouts, issuance of new bonds, conversion of debt to equity as well as $45 million in fresh financing from a private credit arm of BlackRock, the sources added.

The company issued a statement late on Tuesday evening confirming the restructuring agreement but did not provide granular details.


ET in its edition dated July 2nd was the first to report about the bankruptcy proceedings.

Also Read: Global creditors drag Udaan's parent to bankruptcy court in Singapore after $170-million bond default

As per the new refinancing package, all parties agreed that total claims inclusive of outstanding interest as of the end of June, stood at $178 million. Part of this claim – around $35 million – will be repaid upfront to the creditors in cash at par. A new tranche of convertible bonds of $65 million will be issued to the creditors with interest rates of 13%-15%. These new bonds will mature in December 2028. However, the company has agreed to make it a secure instrument and rank pari pasu (or on equal terms) with the fresh facility that is being provided by Blackrock.

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The remaining $78 million outstanding will be exchanged into preferred convertible shares and will be senior to other equity holders.

Other than Blackrock, existing investor Lightspeed Ventures has agreed to chip in. Last month, it had given a $40 million “top up” loan to settle the sums due as a super senior facility. That line is also getting converted into preferred equity.

Lightspeed is the single-largest shareholder in the company, holding about 33%, having deployed $917 million so far, as per Tracxn data. The residual $50 million is being used to fund expenses including payments to advisors of the company and the creditors as well as to support cash burn for another 12 months. The company has told the creditors that it needs liquidity support for a year which will facilitate listing the business.

In 2025, the company secured the National Company Law Tribunal (NCLT) approval to consolidate its technology, logistics and wholesale trading units under a single entity, Hiveloop Ecommerce. Singapore-registered Trustroot was to be reverse merged into the India-domiciled entity as part of this exercise ahead of the IPO.

The creditors including Tor Investment Management, Samena Capital, Arena Investors, Catalyst Funds and Evolution as well a unit of Japanese investment bank Nomura moved Singapore High Court after Udaan’s overseas holding company Trustroot Internet Pvt Ltd defaulted on $170 million compulsorily convertible notes or bonds due on June 30. The creditors had hired Alvarez and Marshal as the official liquidator in the bankruptcy proceedings. PJT Partners and law firms Akin Gump Strauss Hauer & Feld and Wong Partnership were also brought on board by them to help negotiate with the company. The company is being advised by Houlihan Lokey and Kirkland & Ellis LLP on the debt restructuring.

Bengaluru-headquartered Udaan, backed by Silicon Valley venture capital firm Lightspeed Ventures along with DST Global and Tencent, is a 10-year-old business-to-business (B2B) ecommerce company founded in 2016 by former Flipkart executives Vaibhav Gupta, Sujeet Kumar and Amod Malviya. Other than Lightspeed, DST Global and M&G together own another 15.3% while the company’s three founders hold 12.5% all told. Udaan operates across diverse categories including FMCG, staples, fruits & vegetables, and pharma. It buys items in bulk and sells to small retailers. Since 2022, Kumar and Malviya have withdrawn from the company’s day-to-day operations. Kumar still holds a board position, while Malviya has started Pre6, an AI-powered manufacturing firm.

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Started with the goal of digitally disrupting India’s well-entrenched retail supply chain, Udaan began by deep discounts to attract retailers. However, a large part of the country’s trader ecosystem has shown little interest in giving up longstanding relationships with offline distributors. Udaan’s strategy of competing across multiple product categories also failed to deliver the desired results. In contrast, its B2B commerce peers focused on specific domains and built deep expertise over time.

Since its launch till FY25, Udaan has incurred an estimated cumulative loss of around Rs 13,000 crore.

"The continued support from our existing investors, alongside the participation of new capital partners, reflects strong conviction in our business fundamentals and long-term opportunity,” said Vaibhav Gupta, Co-Founder & CEO, Udaan. “With a stronger balance sheet and a simpler capital structure, we are well positioned to continue investing in customer value, deepening our market leadership and progressing towards our long-term public market ambitions."

According to the company, over a 10-quarter period from Q4 CY23 to Q1 CY26, it has delivered approximately 25% CAGR in revenue, improved contribution margins by nearly 500 basis points, and reduced EBITDA burn by around 70%. With its largest operating cities and clusters now EBITDA profitable, Udaan continues to demonstrate sustained progress towards profitable growth and the scalability of its cluster-led operating model.

Blackrock, Lightspeed Ventures, Akin did not immediately respond to ET’s detailed questionnaire.

Udaan has also been working with Goldman Sachs for a $150-200 million equity capital raise but for a company that has always been in the red, attracting new external investors at rich valuations has been a challenge. Udaan’s FY25 revenue was down 20% year-on-year at Rs 4,561 crore, and the net loss narrowed by 37% to Rs 1,055 crore. It is yet to file FY26 financials. Investors are said to have valued the company at around $800 million to $1 billion, 50% lower than the previous funding round in June 2025.

Since 2016, Udaan has raised over $2 billion in equity to date in multiple tranches.

The company added in its statement that it is focussing on higher-margin businesses, with its private label portfolio now contributing 15–25% of staples sales across operating cities, strengthening the quality of earnings and driving operating leverage. In another significant milestone, the company's largest operating city, Bengaluru, has achieved EBITDA profitability, demonstrating the effectiveness of disciplined execution and reinforcing steady progress towards sustainable, long-term profitable growth.