Inside Udaan’s push to digitize India’s B2B retail market

During a recent visit, Microsoft chief executive Satya Nadella reiterated his company’s commitment to India and revealed a new fund to help SaaS startups in the country.

And then Nadella and Anant Maheshwari, president of Microsoft India, discussed the success story of B2B platform Udaan in three separate onstage public appearances.

Headquartered in Bangalore, Udaan is a business-to-business e-commerce marketplace founded by former Flipkart executives Amod Malviya, Vaibhav Gupta and Sujeet Kumar. The startup used Microsoft’s free Azure credits to scale in its early days; as in some other markets, Microsoft, Amazon and Google offer free cloud credits in bulk to early, promising Indian startups in a bid to onboard them and see if their solutions could be relevant to other clients down the road.

More often than not, these bets don’t work, but sometimes they pay off. Udaan, valued at about $2.7 billion after raising nearly $900 million from investors like Lightspeed Venture Partners, Tencent Holdings, GGV Capital and Hillhouse Capital, has become one of Microsoft India’s biggest clients in the last three years.

Udaan was founded in 2016 at the tail end of India’s e-commerce frenzy, when scores of startups that had attempted to build business-to-consumer online shopping platforms were conceding defeat.

At the time, very few players — like Power2SME and Moglix (industrial products) and Bizongo (packaging for businesses) — were looking at the business-to-business market in India.

But despite venturing into a road less traveled, Udaan had ambitious dreams. The startup was building its own logistics network, a herculean task that even Flipkart and Amazon avoided to a certain measure for years, yet it was reaching an audience that had never sold online.