Startups chase convertible notes amid downturn

Starved of equity funding for months, Indian startups are turning to another way of raising funds – one that doesn’t force them to settle for a reduced valuation. After raising $200millionthroughconvertiblenotesfromaclutchofinvestorsinJanuary,B2BstartupUdaanistappingthisinstrumentonceagaintoraiseanother$150-200 million. PharmEasy, too, is eyeing convertible notes as it looks to rake in $100 million.

Business commerce platform Udaan is in advanced talks to close a fresh round of debt financing worth $150-200 million through convertible notes, sources told us.

This will mark the second such capital infusion for the B2B startup this year as late-stage equity funding remains scarce in one of the world’s fastest-growing startup ecosystems.

“The new tranche of funding is coming largely from existing investors while one or two new investors may also join,” our sources said.