India’s digital B2B commerce sector is heating up again—and Udaan is preparing to make a bold move. Just weeks after raising $114 million in a Series G round, Udaan is reportedly in advanced talks to acquire ShopKirana, a rival backed by Info Edge. The deal, still being finalised, is expected to be structured as a stock swap, with ShopKirana’s investors likely to gain 7–8% equity in Udaan.
If completed, this acquisition will be a major strategic milestone for Udaan and a turning point for India’s fragmented B2B retail ecosystem. Here’s why it matters.
Credits: The Arc
A Merger That Redraws the B2B Map
Udaan’s current operations are concentrated in 15 market clusters, with Bengaluru and Hyderabad serving as core hubs. In contrast, Indore-based ShopKirana has built a stronghold in non-metro cities across Madhya Pradesh, Uttar Pradesh, Gujarat, and Maharashtra—areas where Udaan has limited reach.
By acquiring ShopKirana, Udaan would instantly expand its geographic footprint into under-penetrated but high-demand regions. These are markets where brand loyalty is strong, local supplier relationships are critical, and digitization is still catching up—making ShopKirana’s infrastructure a valuable asset.
Private Labels and Margin Expansion
A particularly attractive part of ShopKirana’s portfolio is its private label, KisanKirana, a consumer food brand that generates approximately Rs 100 crore in annual revenue. KisanKirana’s products are sold both to retailers and directly to consumers, making it an ideal asset for vertical integration.
For Udaan—which already operates in categories like FMCG and pharma—this is a golden opportunity. The margin benefits of private labels are well-known in retail, and with KisanKirana, Udaan can accelerate its path toward profitability by owning both the distribution and the brand.
Cultural Fit and Strategic Synergy
Beyond financial logic, the acquisition makes strategic sense from a cultural standpoint. Since Vaibhav Gupta became CEO in 2021, Udaan has shifted from aggressive expansion to a disciplined, efficiency-first approach. This is closely aligned with ShopKirana’s ethos, which has always emphasised lean operations and category focus.
The synergy between the two companies’ leadership styles and priorities could lead to a smoother post-merger integration—a challenge that often derails acquisitions, especially in the startup space.
The Numbers Behind the Move
Despite its diminutive size, ShopKirana is notable for its financial discipline. It reported sales of Rs 639 crore and a slight loss of Rs 55 crore for FY24. In contrast, Udaan reported a huge net loss of Rs 1,674 crore despite earning Rs 5,706 crore in revenue. This indicates that even while ShopKirana generated almost 10% of Udaan’s sales, its losses were just 3% of its total.
The contrast draws attention to the divergent ideologies: While Udaan is currently recuperating from a high-burn, growth-at-all-costs strategy that peaked in 2021, ShopKirana has expanded steadily since its start in 2015.
Riding the Consolidation Wave
This acquisition comes amid a wave of consolidation in India’s B2B commerce space. Recently, rival platform Jumbotail acquired Solv, with more deals expected as companies seek to cut losses, eliminate overlap, and streamline supply chains.
With Udaan and ShopKirana coming together, the landscape is set for fewer but more powerful players. For investors, this could be a welcome signal that the sector is moving toward rationalisation and profitability.
Credits: Outlook Business
What’s Next?
Insiders claim that an in-principle deal is already in place, despite the fact that both businesses declined to comment. In addition to gaining a footprint and a brand, Udaan will also acquire a highly effective operating model that might be used as a model for future expansion if the purchase closes.
The purchase of ShopKirana might be Udaan’s best move to date in a market where margins are narrow and retaining customers is difficult.
