1K Kirana, an Indian startup that operates an eponymous hyperlocal shopping app and retail distribution network, has raised $25 million in a new round of funding as it tries to help brands and neighborhood stores to reach more consumers.
The three-year startup’s Series B funding was led by Alpha Wave Global, Info Edge Ventures and Kae Capital. A number of angel investors, including Amrit Acharya, founder and chief executive of Zetwerk, also participated in what the startup called the first tranche of a larger funding round.
Neighborhood stores dot tens of thousands of cities and towns in India. They have survived – and thrived, despite – billions of investments by retail giants in the country. But they struggle to secure inventory in large volumes and at good prices.
1K Kirana tries to solve it with a multi-faceted approach. The startup serves as a distribution network for these stores and also helps them with digital marketing to reach more consumers. 1K Kirana also operates an app for consumers, which they can use to discover, order and pay for their purchases.
“We control their entire supply chain. We supply them with the merchandise, we do the marketing and we make sure that store traffic increases. These stores operate as a franchise partner and earn money through commissions instead of playing with margin,” Kumar Sangeetesh, co-founder of 1K Kirana, explained in an interview with TechCrunch.
Consumers can either have the order delivered to their home or pick it up from the nearest store. If they ordered an item that is not available in store, 1K Kirana delivers it to the store.
The vast majority of items that neighborhood stores sell fall into the FMCG category. The challenge of operating in the universe of this category is that store owners make a single digit profit by moving these items. The industry agrees that this is a problem worth addressing because these stores move the vast majority of their inventory, so reaching them – and by proxy, their consumers – is crucial to everyone’s success.
What 1K Kirana is trying to do, at a fundamental level, is to help these stores dramatically increase the number of items they sell, so that it’s possible for them to scale. At the same time, 1K Kirana serves consumers, giving them access to a larger catalog of items, more selections across all categories, and discounts.
“In our case, I aggregate supply requests from stores, go to manufacturers, reduce costs and pass the cost benefits on to consumers,” said Sangeetesh, who added that 1K Kirana n is not a kirana-tech startup, but a consumer. cheek.
“The kind of impact that 1K has created in the lives of consumers and franchise partners in a very short time is extremely difficult to achieve. The 1K Mall app has already empowered thousands of non-urban Indians to shop online for the first time,” Kitty Agarwal, partner at Info Edge Ventures, said in a statement.
“We believe the 1K team is building an iconic business that is transforming the way non-urban India shops for their daily needs by expanding their choices with affordable and higher quality options. The founding team is exceptional in their execution and we are very excited to strengthen our partnership with them.
1K Kirana, which currently has a network of around 1,000 stores, claims to have served over 1 million customers in over 25 districts of Delhi, Haryana, Rajasthan and Uttar Pradesh. He plans to deploy the new funds to hire more tech talent to expand 1K Kirana’s reach to more than 100 districts, he said.
The startup will also look at different monetization opportunities, including with data, he said.
“Sangeetesh, Abhishek and Sachin have built a business that combines strong growth with an attractive unit economy. We are thrilled to partner with them as they bring a modern retail experience to underserved consumers in the $600+ billion Indian grocery market,” said Navroz D. Udwadia, Founder and Partner of ‘Alpha Wave Global, in a statement.