ETtech Deals Digest: With funding hard to come by, startups look at convertible notes

Startups have been moving towards finding new ways of raising money, and doing it through convertible notes is one such hack. This week, B2B e-commerce startup Udaan raised $120 million through convertible notes, while delaying its IPO plans.

What are convertible notes? To put it simply, a company raises money through convertible notes by taking a short-term loan in exchange for the promise of equity at a later time. This exchange of equity happens typically during a later funding round or IPO. Recently, edtech giant
Byju’s also raised $250 million through convertible notes.

ETtech

Boat picks up $60 million in funding from Warburg Pincus, Malabar Investments: The D2C audio products and wearables brand has
raised $60-million, or about Rs 500-crore, financing through convertible preferred stocks notes from existing investor Warburg Pincus and new investor Malabar Investments, and has formally withdrawn its listing plans. Boat has put a minimum valuation cap of around $1.2 billion as part of this funding.

Udaan raises $120 million through convertible notes: Business-to-business (B2B) ecommerce startup Udaan
has raised $120 million through convertible notes and debt from existing shareholders and bondholders. Sources said that $30-50 million is expected to come in another tranche.

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