ShopKirana doubled its revenue to Rs 400 crore in the pandemic year. The heady growth comes after a steady start
Sumit Ghorawat, co-founder, ShopKirana (Image: Akashdeep Verma)
The loud command before the start of a race always intrigued Sumit Ghorawat. In school, nobody explained the young lad the meaning of the phrase ‘ready, steady, go’. In college, he would notice some of his friends getting disqualified in the track and field competition. The obvious reason was a ‘false start’ before the firing of the gun, but what led to the ‘false start’ was still a question mark for Ghorawat, who graduated in chemical engineering from the Dubai campus of BITS Pilani in 2009. Over a decade later, the 33-year-old has found the answer: The sprinters were ‘ready’, but they were not ‘steady’.
Ghorawat, and his friends—Deepak Dhanotiya and Tanutejas Saraswat—stayed steady after they started ShopKirana in Indore in 2015, and stayed put in the Tier II city till the end of 2018. The business-to-business (B2B) supply chain-focussed startup for mom-and-pop (kirana) stores started working with a handful of kiranas for a few months; closed the year with over 100 stores, gradually increased the network over the next few years in Indore, and closed FY18 with a revenue of Rs8.92 crore. “Now we were confident of our business model, and ready to move outside the steady,” recalls Ghorawat, co-founder of ShopKirana.
In December 2018, two years after the startup raised an undisclosed pre-Series A round, ShopKirana grabbed the attention of Info Edge. The backer of online food delivery Zomato, along with others such as AET Fund, pumped in $2 million into the startup. ShopKirana now forayed into Bhopal and Jaipur. The impact was dramatic. ShopKirana saw its FY19 revenue jump to Rs24.4 crore. Five months later, the startup bags a Series B round of $10 million in August 2019, and enters into five more cities. The subsequent uptick in revenue was again dramatic: A jump of over 9x to Rs200 crore in March-ended FY20. A year after the lockdown, ShopKirana has doubled its revenue to over Rs400 crore; the startup has kept its eight-city footprint steady; and is now planning a heady expansion across 30 Tier II cities in a year.
Ghorawat explains the magic behind the staggering growth. “It’s ready, steady, and heady,” he smiles, explaining how the startup got its act right. Staying in Indore for four years made ShopKirana ready with a business model which could be scaled subsequently. “A long one-city stint also made us steady,” he contends. The team figured out the unit economics. While the loss in FY20 was Rs24.72 crore, it marginally increased to Rs30 crore in the next fiscal. During the same period, Ghorawat underlines, revenue vaulted from Rs200 crore to Rs400 crore. “We now work with 50,000 kiranas across four states, including 3,000 in Indore,” he claims.
Though the pandemic—with grocery falling under essential services during the lockdown last year—came as a tailwind, ShopKirana had been running on rocket fuel much before the outbreak of Covid. The reason is not hard to find. India has an estimated 13 million kiranas—accounting for about 88 percent of FMCG sales—and most of them are light years away from embracing technology-led operations. From inventory management, reducing cost of operations, transparency in pricing, newer revenue streams to effective support on credit, GST support, digital payments requirements and credit management, startups are helping kiranas modernise and streamline operations.