BENGALURU: Business-to-business online marketplace Udaan is on course to become the fastest Indian startup to reach Unicorn status, soaring to the $1 billion valuation milestone in merely 26 months of registration.The company, founded by three former senior executives of Flipkart , is in advanced talks to raise $225 million from existing investors DST Global and Lightspeed Venture Partners’ global fund, according to two people familiar with the development.“Udaan was planning to raise its next round of financing after December but started seeing interest from investors. Existing backers have decided to double down again on the company,” one of them said, adding that the Bengaluru-based startup is being valued at just over $1 billion in its latest fundraise.Udaan in February secured about $50 million from Lightspeed and Apoletto Asia, the personal investment vehicle of DST Global’s Russian billionaire founder Yuri Milner, after raising $10 million two years earlier, also from Lightspeed. Its latest fundraise is expected to boost its February valuation by five times.Online food-delivery platform Swiggy , messaging app Hike, and advertising platform InMobi all took about four years to be valued at more than $1 billion. Paytm Mall became a Unicorn in about 14 months, but it had the benefit of being spun out from its parent company with a brand and business already established.Udaan cofounder Sujeet Kumar and DST Global did not immediately reply to emails on the matter. Lightspeed India’s managing director Bejul Somaia confirmed the investment but declined to comment on the specifics.Udaan’s business model of providing a B2B ecommerce platform for manufacturers to sell directly to shop owners and merchants is seeing increasing competition from the likes of Amazon Business, Metro Cash & Carry, Walmart and Alibaba. Reliance Industries, too, is expected to enter the segment.The market for B2B ecommerce is estimated by industry to reach $700 billion by 2020, much higher than the $50-100 billion estimate for consumer-facing online retail in the same period.Udaan was registered as Hiveloop Technology Pvt Ltd in June 2016. It launched a pilot product in November 2016 before a full rollout in June 2017.“Udaan has seen gross value of transactions on the platform jump by over 12 times in the last one year and is doing Rs 300-400 crore of sales a month,” said one of the people mentioned earlier.The company has 130,000-150,000 buyers and sellers on the platform and operates in the apparel, electronics, staples and fast-moving consumer goods categories. It plans to add the home and kitchen, office supplies, industrial goods, and fresh fruits and vegetables categories as well.Udaan also has plans to build its own supply chain, which will involve setting up large warehouses so it can offer better rates with improved reliability of shipments. It is also building a lending play by which it will underwrite working capital loans to buyers on the platform.Udaan currently picks up products from manufacturers and sellers in 80-100 cities and delivers across 800 cities and towns across the country.The company was cofounded by Vaibhav Gupta, Amod Malviya and Kumar. Kumar was earlier a senior operations executive at Flipkart running the logistics unit Ekart and WS Retail, which was then the main seller on the marketplace. Gupta led functions like product management and finance at Flipkart, and Malviya was the chief technology officer.Investor interest in B2B ecommerce has been picking up and companies in the space received nearly $200 million across 22 funding rounds in 2017, according to Tracxn data. B2B ecommerce had raised $115 million in 2016 and about $30 million in the year prior.But no company has been able to scale up as fast as Udaan and some startups in the space have even had to shut operations. Power2SME and Indiamart, though, have been operating in the space for years. Indiamart is planning an IPO this year.A few B2B ecommerce startups have recently raised capital, including Nandan Nilekani-backed ShopX ($35 million from Fung Strategic Holdings), and OfBusiness ($30 million from Creation Investments).“The B2B ecommerce space in India is completely fragmented from a supply-chain point of view, so that makes it a ripe opportunity for someone to come in and organize the whole sector,” said Rutvik Doshi, managing director at Inventus Capital India, which invested in Power2SME in 2013. “We have seen the growth (this sector can offer) and how there is headroom for more.”