Swiggy Sells Lynk Logistics to Udaan for Rs 500 Crore
Swiggy, a prominent foodtech and quick commerce platform, has reached an agreement to sell its retail logistics division, Lynk Logistics, to the eB2B platform Udaan for Rs 500 crore. This deal will significantly bolster Udaan’s foothold in vital consumption markets.
Details of the Strategic Acquisition
As part of this transaction, Swiggy will secure approximately a 2.8% stake in Udaan via preference equity shares issued by Trustroot Internet Pvt Ltd, the parent company of Udaan. Additionally, Swiggy plans to invest Rs 75 crore in primary equity, which will give it an extra 0.4% stake.
Udaan’s Financial Growth
The transaction coincides with Udaan’s ongoing financial improvements. From Q4 CY23 to Q1 CY26, the company has experienced a compound annual growth rate (CAGR) of about 25% in revenue, an enhancement in contribution margin by nearly 500 basis points, and a reduction in EBITDA burn by approximately 70%. Private labels now contribute to 15% to 25% of Staples sales across its operational cities, with Bengaluru, its largest market, achieving EBITDA profitability.
Enhancing Distribution Capabilities
The acquisition will incorporate Lynk’s distribution strengths, existing brand partnerships, and retail networks into Udaan’s services. Notably, Bengaluru, Hyderabad, Chennai, and Kolkata account for roughly 75% of Lynk’s revenues. This deal aims to connect prominent consumer brands with a broader network of retailers.
Competitive Landscape in eB2B Distribution
Lynk competes directly or indirectly with other platforms such as Udaan, 1K Kirana Bazaar, Jumbotail, ElasticRun, and various other eB2B and retail distribution platforms. These companies leverage technology for distribution, procurement, and supply chain solutions, making this acquisition vital for Udaan’s competitive stance in the fragmented Indian retail distribution sector.
Background on Lynk’s Acquisition
Swiggy initially acquired Lynk in July 2023 through a share swap arrangement, signifying its entry into India’s B2B retail distribution market. The specific transaction value was not disclosed at that time. Founded in 2015, Lynk boasts a network of over 100,000 retail stores spanning eight cities, partnering with leading FMCG brands as an authorised distributor.
Recent Udaan Capitalisation
This latest development follows Udaan’s $160 million recapitalisation, which consisted of new equity, additional debt, and debt-to-equity conversions facilitated by Lightspeed Venture Partners, M&G Investments, and Moonstone Capital. This recapitalisation strategy included around $45 million in private credit financing from a major global investment management firm, enhancing Udaan’s financial stability for its future growth initiatives.
Statements from Executives
Swiggy’s CFO, Rahul Bothra, remarked that the deal combines Lynk’s unique capabilities with Udaan’s scale and technology-driven platform. Udaan’s co-founder and CEO, Vaibhav Gupta, noted that this acquisition not only strengthens the company’s business but also increases its presence in key consumption markets.