B2B e-commerce unicorn Udaan has acquired Indore-based retail-tech startup ShopKirana in an all-stock deal, a strategic manoeuvre designed to accelerate its path towards profitability and a planned Initial Public Offering (IPO). This pivotal acquisition is set to deepen Udaan’s penetration into India’s burgeoning Tier 2 and Tier 3 cities, expanding its footprint in the fast-moving consumer goods (FMCG) and HoReCa (Hotel, Restaurant, Catering) verticals, thereby fostering more inclusive and efficient supply chains across the nation.
Under the terms of the agreement, Udaan will assume full equity in ShopKirana, while ShopKirana’s founders and early investors, including InfoEdge Ventures and Sixth Sense Ventures, will receive a minority stake in Udaan. This consolidation is a significant strategic milestone for Udaan, as articulated by its co-founder and CEO, Vaibhav Gupta, positioning the company for enhanced unit economics and broader market reach. ShopKirana, established in 2015, has built a robust supply-chain network specifically tailored for kirana stores in non-metro cities such as Indore, Bhopal, Agra, Meerut, and Surat, including its private-label brand, Kisan Kirana.
The acquisition is poised to yield substantial operational synergies, particularly in the FMCG segment and the rapidly growing HoReCa categories. By integrating ShopKirana’s established local supply-chain relationships and credit infrastructure, Udaan aims to significantly boost its unit economics, widen its market reach, and enhance overall sourcing and logistics efficiency. This streamlining of operations is crucial for reducing waste and optimising resource allocation, contributing to a more eco-friendly and sustainable distribution network across India’s diverse urban and semi-urban landscapes.
This deal follows Udaan’s recent Series G funding round, which successfully raised $114 million from prominent investors like Lightspeed Venture Partners and M&G Investments. These fresh funds are strategically earmarked for strengthening core business verticals and further streamlining operations, ensuring that the combined entity can scale high-turnover categories effectively. The enhanced operational leverage, driven by data-driven logistics and digital infrastructure, is expected to deliver superior value to both suppliers and retailers.
The expansion into Tier 2 and Tier 3 cities through this acquisition holds profound implications for building equitable and gender-neutral cities. By providing small and medium-sized businesses in non-metro areas with access to a robust digital commerce platform, Udaan is empowering local entrepreneurs, fostering economic inclusion, and creating new opportunities for growth. This democratisation of access to efficient supply chains helps bridge the urban-rural divide, ensuring that the benefits of digital transformation are widely distributed and contribute to a more balanced and sustainable national economy.
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