Indian e-commerce startups CitymallThe company, which focuses on budget grocery delivery for Level 2 and 3 towns, said today it has raised $47 million in Series D funding led by Accel and has been involved in existing investors including Waterbridge Ventures, Citius, City Catalius, General Catalyst, Heivation Capital, Hevation Capital, Norwest Venture Partners and Jungle Ventures and Jungle Ventures.
Series D competitions are three years after the company $75 million round C Leaded by Norwest Venture Partners. During this period, the company’s valuation of $320 million has remained flat. According to sources familiar with the deals spoken with TechCrunch, investors used nearly four times the multiples as Citymall’s revenue over the past year as benchmark. The company has raised $165 million to date.
Citymall investors told TechCrunch that previous valuations reflected the bullish market environment at the time, which explained why the valuation has not changed despite the company’s growth. However, they remain optimistic about the company’s trajectory.
“We have been an investor in CityMall since Series A and we want to redouble our efforts into this investment because we believe online grocery shopping, and the value segment in it, is the largest consumer market in India,” Accel’s Pratik Agarwal told TechCrunch over the phone.
Citymall’s funds are at a time when the fast trading frenzy in the Indian market. The company likes it Blink,,,,, ZeptoSwiggy Instamart and Tata-owned Bigbasket are eager to serve customers in 10 minutes. CityMall hopes to take a different approach by targeting different customer segments.
The startup aims to valued customers who plan to buy groceries instead of ordering instant demand through a fast commercial app. Citymall CEO Angad Kikla explained that the app offers half of the product choice (SKU) for fast business applications, but twice as many options for offline value stores. (SKUS or “Inventory Units”, see the quantity of different products available.)
“Although e-commerce grows with the growth of the segment, the penetration of online grocery stores is low,” Kikla said. “Most people in India have value awareness when buying groceries. We want to cater to that accomplice. We want to see ourselves as DMART in the online world.”
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Founded in 2019, the startup initially relies on community leaders in different cities to sell its products, accept orders and handle the last mile fulfillment before the Covid-19 outbreak. During the pandemic, when people have just been introduced to order groceries online, some customers need hands-on help. After this period, the company is only used to perform fulfillment in a way that reduces costs and simplifies operations.
The company’s strategy focuses on establishing dedicated labels and partnerships with manufacturers to deliver goods at lower prices than competitors while creating profit margins through operational and supply chain efficiency. Unlike fast business startups, CityMall does not charge any processing or delivery fees and usually offers items within one day, rather than in valuable customers who do not need items immediately.
CityMall said its main user base is customers with monthly revenues ranging from Rs 15,000 to Rs 80,000 (170-$910). The company reported an average order value of Rs 450 -500 (between USD 5-6).
The company operates in 60 cities including Delhi NCR, Uttar Pradesh, Haryana, Bihar and Uttarakhand. Cycra said Citymall’s goal is to expand to cities adjacent to the current market to better utilize its existing warehouses.
According to the research company Entrackr. The startup said it was operationally profitable, but did not provide a timeline for achieving overall profitability.
The company is competing for operations in the field, which is under pressure from local stores, online grocery platforms and even fast business platforms. According to Bloomberg Intelligence, the fast business platform is expected to capture By 2035, 20% of e-commerce sales in India.
Manish Kheterpal, co-founder of Waterbridge Capital, a company that runs multiple rounds at CityMall, said Fast Business would encourage impulsive spending through marketing to users. By contrast, he said Citymall has lower operating costs compared to its fast business competitors, giving it an advantage.
“Citymall offers cheap essentials to users who may order several times a month. The company buys items directly from suppliers and uses its community leaders to achieve low-cost allocations, resulting in a healthy gross margin.”
According to analysis from Bernstein’s study, food and grocery stores dominate India’s largely unorganized retail sector. The company also estimates that online grocery shopping will account for 12% of e-commerce sales by the end of this calendar year.
Despite rapid growth in commerce, companies outside the metropolitan sector face higher population costs per order cost. analyze By strategic company Redseer. Citymall’s argument is that value-conscious customers will choose their platform over fast commerce due to lower fees and product costs. By combining it with lower delivery costs, the company believes it can achieve better economies of scale by serving more users.
