Udaan Buys ShopKirana To Boost Profitability, FMCG Play

SUMMARY

With this acquisition, Udaan will deepen its focus on profitability and bolster its presence in FMCG segment

Udaan has not disclosed the financial terms of the deal

Last month, Udaan closed its Series G funding round at $114 Mn

B2B ecommerce platform Udaan has acquired retail tech startup ShopKirana in an all-stock deal to deepen focus on profitability and bolster its presence in FMCG and hotel, restaurant, and catering (HoReCa) sectors.

However, the company did not disclose the financial terms of the deal.

The acquisition comes a month after Udaan closed its $114 Mn Series G funding round.

The buyout will help Udaan to integrate ShopKirana’s retailer network and expertise in the FMCG space with the former’s tech infrastructure and supply chain capabilities.

“This acquisition is a strategic milestone in our journey to the IPO and beyond. ShopKirana has a quality team, who have worked in-depth on the FMCG category and excelled at designing for costs,” said Udaan cofounder and CEO Vaibhav Gupta.

ShopKirana’s stakeholder Info Edge said in a separate statement that the company will transfer its entire shareholding (60,673 shares or 26.14% stake) in ShopKirana to Udaan’s subsidiary HEPL, in exchange for a stake in the subsidiary.

With this, Info Edge will get 1,68,70,568 shares of HEPL aggregating to about 0.91% stake in the company.

Founded in 2015 by Tanutejas Saraswat, Sumit Ghorawat and Deepak Dhanotiya, ShopKirana is a B2B commerce platform which provides supply chain solutions to retailers.

The company directly works with brands to enhance demand. It claims to be active in more than 30 Indian cities and onboarded more than 100,000 retail stores.

In 2022, the company raised $38 Mn from Sixth Sense Ventures, Oman India joint investment fund, Info Edge and other investors.

On the other hand, founded in 2016 by Gupta, Sujeet Kumar and Amod Malviya, Udaan is also tapping the same market as ShopKirana.

It also works in the B2B ecommerce space, facilitating retailers with supply chain and logistics solutions. The company claims to be operating in categories including FMCG, staples, fruits & vegetables, and pharmaceuticals.

Udaan managed to trim down its net loss by more than 50% to INR 1,674 Cr in the financial year that ended in March 2024. Besides, it recorded a revenue of INR 5,707 Cr in FY24.

As per Info Edge partner Kitty Agarwal, the company will be planning to hit the Indian public market within the next 2 years.

Notably, this is not the first time that Udaan is considering a public listing in India. Back in 2022, the company set a timeline of going IPO in 12-18 months. However, the plans did not materialise.