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Mint
a day ago
- Business
- Mint
Accel-backed CityMall breaks even in FY25 after pivot from community-led model
BENGALURU : E-commerce startup CityMall has turned operationally profitable in FY25, following a major revamp of its grocery delivery model across tier-2 and tier-3 towns. The Gurugram-based firm, now active across 60 cities in Uttar Pradesh, Haryana, National Capital Region (NCR), hit breakeven after streamlining its supply chain and pivoting away from its original social commerce approach. Backed by Accel, Elevation Capital, and General Catalyst, CityMall has grown over 3x in the past 15 months and is currently doubling its revenue year-on-year, according to co-founder and CEO Angad Kikla. Also read: Accel to sharpen focus on startups serving tier-2 areas after $650 mn fundraise 'We are now positive at the unit economics level. We are making money on every order through multiple iterations in our supply chain while building the cheapest possible grocery distribution channels," Kikla told Mint in an exclusive conversation. While absolute FY25 numbers are yet to be filed with the Ministry of Corporate Affairs (MCA), the company clocked ₹427 crore in revenue in FY24 with a loss of ₹159 crore—a 10% increase over the previous year, per Tofler data. Rethinking the model CityMall, founded in 2019 by Kikla and Naisheel Verdhan, was initially built around group-buying led by 'community leaders"—local influencers who drove sales in their neighbourhoods. But this social commerce model was scrapped after the company faced scaling challenges. 'We started in the pre-Covid era where fewer consumers were purchasing grocery and other goods online. At the time, our community leaders were tasked with generating demand in their respective clusters as well as facilitating fulfilment," Kikla said. But post-pandemic, the behaviour shifted. 'We realised that everybody is using e-commerce. We don't need to do the tough task of getting them on the platform through the micro entrepreneurs. Finding a way of delivering them with the best price is the most critical part in this category." To solve this, CityMall now works with local milkmen or shop owners in each cluster. Orders are delivered in bulk to these micro-entrepreneurs from centralised warehouses, and they handle last-mile fulfilment. This tweak has improved operational efficiency by at least 3x, Kikla noted. The company is currently in talks with investors—including existing backers like Accel—for a new funding round, possibly at a lower valuation. In March, it raised ₹50 crore in debt from Trifecta Capital and Alteria Capital. In total, CityMall has raised over $100 million, with its last major equity round being a $75 million Series C in March 2022 led by Norwest Venture Partners. Social commerce struggles to scale CityMall isn't the only player to pivot. Some of the largest startups in the space have pivoted from the model owing to inherent structural and behavioural barriers. Bengaluru-based value e-commerce firm Meesho scaled down its community offering Superstore in 2022 as did Lightspeed-backed Udaan with its 'Price Company' vertical. DealShare, which raised nearly $400 million in total, has also moved to a hybrid model. Experts point to the fragmented nature of India's consumer base. 'High diversity in income levels, regional preferences, and technology adoption creates challenges in standardising or scaling group-based online models especially in price-sensitive markets like India," said Mit Desai, consumer and internet practice member at consulting firm Praxis Global Alliance. Offline stronghold Even as digital transactions surge across India, grocery shopping in smaller towns remains largely offline. 'Despite the rise of 'shopcializing' (shopping influenced by community/friends), the actual transactions still skew towards individual rather than collective decision-making online," Desai said. Also read: Realtors eye new addresses in tier-2 cities According to him, the online shopper base grew rapidly until 2023 but is expected to slow between 2023 and 2027, with growth tapering to 10% CAGR from 24% earlier—due to metro saturation and slower adoption in smaller towns. Yet, Kikla remains optimistic. The company plans to deepen its presence in its existing markets and scale further in states like Bihar, betting on its revamped supply chain and cost-conscious execution. Also read: AI-native startups edge out SaaS in investor playbooks as tech shift accelerates
Economic Times
17-05-2025
- Business
- Economic Times
Dailyhunt parent VerSe to lay off 350 employees this month in push for profitability
Dailyhunt parent VerSe Innovation is laying off 350 employees this month as part of a broader strategy to accelerate investments in artificial intelligence (AI) and streamline drive this strategic transformation, VerSe will utilise AI for automating several manual processes to 'increase operational efficiency', the Bengaluru-based company said in a statement on initiatives are aimed at helping the company turn profitable by the end of this financial year. VerSe joins other content-led startups that have cut workforces this year. This includes Google-backed vernacular media platform ShareChat, which laid off 5% of its staff in January, and Lightspeed-backed Pocket FM that let go of 75 employees amid a push for profitability. 'VerSe Innovation has been undergoing a strategic transformation to build a more agile, focussed, and future-ready organisation…To build a more future-ready organisation where talent is cross-leveraged across business units and resources are directed towards growth segments, the company will streamline its workforce by approximately 350 roles this month,' the company said. 'Building on this momentum, VerSe Innovation projects over 75% revenue growth in FY25, outpacing the anticipated 10-15% growth rate of the Indian digital advertising sector,' it said. 'Operational and structural efficiencies and a focus on growth drivers are actions directed to make the company profitable by the end of this fiscal year.' The development was first reported by digital publication current layoffs come two and a half years after the company laid off 150 employees as a cost-cutting FY24, VerSe's operating revenue fell 6.7% to Rs 1,029 crore. The company however narrowed its net loss by 54% to Rs 889 crore. Last month, Deloitte flagged certain internal control weaknesses in VerSe's FY24 audit report. The auditor also noted that these material weaknesses did not impact its opinion on the consolidated financials. VerSe is backed by Canada Pension Plan Investment Board (CPPIB), Ontario Teachers' Pension Fund, James Murdoch's private investment firm Lupa Systems, and Z47 (formerly Matrix Partners). It has raised over $2 billion in funding since inception. VerSe last raised $805 million in a funding round led by CPPIB, valuing the company at $5 billion. In addition to news aggregator platform Dailyhunt, VerSe also runs short video app Josh, which was launched in 2020 after the Indian government banned Chinese social media company TikTok in the country.
Time of India
17-05-2025
- Business
- Time of India
Dailyhunt parent VerSe to lay off 350 employees this month in push for profitability
Dailyhunt parent VerSe Innovation is laying off 350 employees this month as it plans to accelerate investments in artificial intelligence (AI) and streamline operations, it said on Saturday. As part of this strategic transformation, the company will use AI to automate several manual processes to 'increase operational efficiency', according to a press statement. The Bengaluru-based company is taking these steps to achieve profitability by the end of this financial year. With these layoffs, VerSe Innovation joins other content-led startups that have reduced their headcount this year. This includes Google-backed vernacular media platform ShareChat, which laid off 5% of its workforce in January , and Lightspeed-backed Pocket FM that let go of 75 employees amid a push for profitability. 'VerSe Innovation has been undergoing a strategic transformation to build a more agile, focussed, and future-ready organisation…To build a more future-ready organisation where talent is cross-leveraged across business units and resources are directed towards growth segments, the company will streamline its workforce by approximately 350 roles this month,' it said. Live Events 'Building on this momentum, VerSe Innovation projects over 75% revenue growth in FY25, outpacing the anticipated 10-15% growth rate of the Indian digital advertising sector,' the company said. 'Operational and structural efficiencies and a focus on growth drivers are actions directed to make the company profitable by the end of this fiscal year.' Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories The development was first reported by digital publication Entrackr. The current layoffs come two and a half years after the company had to let go of 150 employees as a cost-cutting measure. In the financial year 2024, VerSe Innovation's operating revenue stood at Rs 1,029 crore, down 6.7% from Rs 1,104 crore in FY23. The net loss for FY24 dropped 54% to Rs 889 crore. Last month, VerSe Innovation's auditor had flagged certain internal control weaknesses during the company's audit report for fiscal 2024. In its audit report, Deloitte also said that these material weaknesses did not impact its opinion on the consolidated financials. VerSe is backed by Canada Pension Plan Investment Board (CPPIB), Ontario Teachers' Pension Fund, James Murdoch's private investment firm Lupa Systems, and Z47 (formerly Matrix Partners) and has raised over $2 billion in funding since its inception. It had last raised $805 million in a funding round led by CPPIB, valuing the company at $5 billion. In addition to the news aggregator platform Dailyhunt, Verse Innovation also runs the short video app Josh, which was launched in 2020 after the central government banned Chinese social media company TikTok's operations in India.
Mint
13-05-2025
- Business
- Mint
Is AI the end of human storytelling? Pocket FM bets on collaboration
Audio series platform Pocket FM is betting on collaboration and not competition between humans and artificial intelligence (AI). Rather than replacing human creativity, the company is using AI to support storytellers and scale high-quality audio content. Pocket FM aims to create a platform where humans and AI work together, not against each other. Talking to LiveMint, Vineet Singh, Head, Brand Marketing and Communication at Pocket Entertainment, said that of late, there has been a lot of chatter about AI replacing humans. "We always believe that human storytelling is going to be the core part of creativity," he said. 'With AI, we are going to be able to enhance it and scale it with that same quality at a huge number.' Pocket FM's proprietary tool allows users to write a story, select the background music, and choose an AI-generated voice to narrate it. The tool can also translate the story into multiple languages and change the context according to the geography. According to Singh, Pocket FM has around 50,000 AI-led audio series. The platform has around 200 million users and works on a micro-transaction model. Under the model, a certain number of episodes are free for a user daily. If they want to listen to more episodes of a series, they need to pay for them. Notably, the free episodes change from series to series. Romance remains the most popular genre on the platform, followed by drama and thrillers. However, fantasy and horror are growing at a faster pace, he added. To diversify its storytelling offerings, the company has launched Pocket Novel and Pocket Tools and rebranded itself as Pocket Entertainment. "We will continue looking at more and more formats and more storytelling options to just go out and entertain the world," Singh said. Originally launched in India, Pocket FM is now available in the USA and some European countries, such as Germany and the United Kingdom. It also plans to expand into some Latin American countries. The Lightspeed-backed platform competes with Spotify and new-age content platforms like Krafton-backed Kuku FM and Pratilipi. In 2024-25, Pocket FM's revenue rose 68 per cent to ₹ 1,768 crore. Its US business is said to be profitable, and the India business is expected to become profitable in the next one to two months.
