Udaan, the Bengaluru-based B2B e-commerce major, has acquired ShopKirana in an all-stock transaction, marking a key consolidation move in India’s grocery commerce segment. While both companies position the deal as strategic, an analysis by Entrackr suggests it may be a more subdued outcome from the lens of investors.
Regulatory filings reveal that Info Edge, through its subsidiary Startup Investments Holding Ltd (SIHL), is transferring its 26.14% stake in ShopKirana to Hiveloop Technology Pvt Ltd (HEPL), a Singapore-based subsidiary of Udaan’s parent company, Trustroot Internet.
In return, Info Edge will receive 1.68 crore shares of HEPL, which represents about 0.91% of the company on a fully diluted basis. These shares are linked to 73,561 reference shares at the Udaan parent level and carry a value of $23.13 million, according to the agreement.
This pegs ShopKirana’s enterprise value at approximately $88.5 million, inferred from the valuation of Info Edge’s minority stake. The deal is subject to standard closing conditions laid out in the agreement documents.
Entrackr’s analysis estimates that ShopKirana will account for 3.48% of the value of Udaan’s Indian business, based on Info Edge’s holding in Udaan’s domestic entity.
Since its founding in 2015, ShopKirana has raised over $50 million from investors including Info Edge, Sixth Sense Ventures, and the Oman India Joint Investment Fund. The startup has primarily worked on digitising kirana procurement in Tier II and Tier III cities like Indore, Bhopal, Lucknow, Agra, Surat, and Meerut.
The acquisition aligns with Udaan’s strategy of expanding in high-frequency verticals such as FMCG and HoReCa (Hotels, Restaurants, and Catering), segments that ShopKirana actively operates in.
For FY24, ShopKirana reported a 6.26% dip in gross revenue, clocking ₹639.16 crore compared to ₹681.81 crore in FY23. However, it trimmed its net loss by 30%, bringing it down to ₹55 crore. FY25 financials are still awaited.
The deal also reflects broader challenges in the grocery commerce space, including investor fatigue and mounting pressure on profitability. While scale is achievable given the vastness of the market, sustainable profit models remain elusive. This dynamic has led to a wave of consolidation, as mid-sized players seek exits or partnerships for survival.
ShopKirana appears to have focused on cost discipline to position itself as an acquisition candidate, even at the cost of top-line momentum. For Udaan, which has been actively reducing its EBITDA losses over the past two years, this stock-based acquisition offers a low-risk entry with potential long-term upside.
While near-term returns may be modest, the deal strengthens Udaan’s platform and could yield dividends if ShopKirana delivers beyond current expectations.
