New Delhi, Oct 27 (IANS): Business-to-business (B2B) e-commerce platform Udaan has raised $120 million in convertible notes and debt, as it plans an initial public offering (IPO) in the next 12-18 months amid the funding winter.

Udaan's chief financial officer Aditya Pande wrote in an email seen by IANS that with this round, the total funds raised by Udaan through convertible notes and debt in the last four quarters have crossed $350 million, making it one of the largest structured instrument fund raises in the country.

"Despite the funding related challenges being experienced by the larger start-up ecosystem, this fund raise reflects the confidence of investors in our business model and their endorsement of the journey to unit economics, driven by great progress in evolution of our business model and cost efficiency, that we initiated last year," said Pande.

He added that these steps have not only helped us achieve positive unit economics last quarter, but also improved efficiency in the system, with huge cost benefits, "which is key to building a sustainable business, and being public market ready in 12-18 months".

The Bengaluru-headquartered startup improved its unit economics by "1,000bps with equally strong improvements in both gross margins and operating cost," said Pande.

"The journey of right business design and unit economics has translated into over 60 per cent reduction in burn. Continued focus on customer-first thinking and initiatives on strengthening our value proposition for them have resulted in monthly buyer repeat rates increasing by more than 500 bps in the last 2 quarters," he added.

Earlier this year, Udaan raised $250 million, $200 million in convertible note and $50 million in debt.

In the calendar year 2021, Udaan raised $500 million, taking its total raise to $1.4 billion to date.

To cater to the growing demand, Udaan plans to scale its warehouse capacity to 50 million square feet across the country in the next seven-eight years.