Udaan acquires retail technology startup ShopKirana ahead of IPO

Udaan has acquired ShopKirana in an all-stock deal, aiming to enhance its FMCG expertise, tech capabilities, and supply chain strengths as it prepares for an IPO in the coming years

Initial public offering (IPO)-bound business-to-business (B2B) e-commerce (ecom) firm Udaan on Friday announced the acquisition of retail technology startup ShopKirana in an all-stock transaction. The deal will also bring the internet-based services company Info Edge into Udaan's shareholder base.

 

Financial terms of the deal weren't disclosed, and the transaction requires regulatory approval. However, in a letter to the National Stock Exchange of India, Info Edge has valued the transaction at $23.13 million.

 

The deal combines Udaan, which connects small retailers with suppliers, with ShopKirana, a platform that helps kirana stores manage inventory and operations. 

 

“This acquisition is a strategic milestone in our journey to the IPO and beyond,” Vaibhav Gupta, cofounder and CEO, Udaan, said. “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 help Udaan 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 help Udaan’s profitability by scaling high-turnover categories. It would also help the firm 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,” Sumit Ghorawat, cofounder, ShopKirana, said. “We continue to work towards our shared vision of building a large, future-ready go-to-market retail superpower.”

 

The latest acquisition follows the 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, the firm said.

 

“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, said the merger marked 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 helped kirana stores through digital procurement, transparent pricing, and efficient last-mile delivery. With a footprint in Tier-II and -III cities, such as Indore, Bhopal, Lucknow, Agra, Surat, and Meerut, ShopKirana complements Udaan’s national market presence.

 

Experts said the acquisition reflects increasing consolidation across the ecom companies as they seek profitable growth after years of cash-burning expansion. 

 

Udaan said it continued to show strong contribution margin-accretive growth, clocking over 60 per cent year-on-year growth in 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 Earnings before interest, taxes, depreciation, and amortisation (Ebitda) burn in 2024, and an additional 20 per cent reduction year-to-date in 2025.