Udaan acquires retail technology startup ShopKirana ahead of IPO

Business Standard

18-07-2025

Business-to-business e-commerce firm Udaan acquired retail technology startup ShopKirana in an all-stock transaction, bringing internet company Info Edge into Udaan's shareholder base as consolidation accelerates in the country's digital commerce sector.
The deal combines Udaan, which connects small retailers with suppliers, with ShopKirana, a platform that helps neighbourhood stores manage inventory and operations. Financial terms weren't disclosed, and the transaction requires regulatory approval. However, in a letter to the National Stock Exchange of India Limited, Info Edge has valued the transaction at $23.13 million.
'This acquisition is a strategic milestone in our journey to the IPO and beyond,' said Vaibhav Gupta, co-founder and CEO, Udaan. 'With the combined strength of both organisations and a strong leadership team, we are well-positioned to deliver on our agenda of 'growth with profitability at scale'.'
The acquisition will complement Udaan's leadership across core categories, including staples, fast-moving consumer goods (FMCG), and hotel, restaurant, and catering (HoReCa). ShopKirana and Udaan's integration aims to boost efficiency, expand reach, and add value through combined FMCG expertise, tech, and supply chain strengths.
This combination will further accelerate Udaan's profitability journey by scaling high-turnover categories. It would also help improve operating leverage and deliver differentiated value through data-driven logistics and infrastructure.
'Together, we will unlock growth across existing and emerging markets while delivering superior value to buyers, sellers, and consumers,' said Sumit Ghorawat, co-founder, ShopKirana. 'We continue to work towards our shared vision of building a large, future-ready GTM (go-to-market) retail superpower,' he noted.
The latest acquisition follows the successful closure of Udaan's $114 million Series G fundraise, led by M&G Investments and Lightspeed. The capital will strengthen category leadership in FMCG and HoReCa, expand into new markets, and boost efficiency through scale sourcing, supply chain optimisation, and cost control.
'This strategic consolidation is an important step forward in Udaan's journey towards consolidating the eB2B market, driving profitability with sustained growth, and strengthening the value proposition for retailers and brands,' said Bejul Somaia, partner, Lightspeed.
Kitty Agarwal, Partner, InfoEdge Ventures, noted that the merger marks a significant step towards consolidating the leadership position of the combined Udaan-ShopKirana entity in the sector. 'We're looking forward to the journey ahead as the combined team executes its strategic roadmap with a path toward an IPO in India in the next two years.'
Founded in 2015, ShopKirana has enabled thousands of kirana stores through digital procurement, transparent pricing, and efficient last-mile delivery. With a strong footprint in Tier 2 and Tier 3 cities such as Indore, Bhopal, Lucknow, Agra, Surat, and Meerut, ShopKirana complements Udaan's national market presence.
Experts said the acquisition reflects increasing consolidation among Indian e-commerce companies as they seek profitable growth after years of cash-burning expansion.
Udaan said it continues to demonstrate strong contribution margin accretive growth, clocking over 60 per cent year-on-year growth in CY 2024. Alongside the contribution margin growth and scale operating leverage, Udaan also reduced its fixed costs by 20 per cent, leading to a 40 per cent reduction in EBITDA burn in calendar year CY 2024 and an additional 20 per cent reduction year-to-date in CY 2025.