Tanutejas Saraswat & ShopKirana: Revolutionizing India's Kirana Economy from Tier-II Cities
Discover Tanutejas Saraswat's journey with ShopKirana, building a ₹639 Cr B2B retail-tech giant empowering India's Kirana stores from Indore.
Meet Tanutejas Saraswat, the Co-founder and CEO of ShopKirana, a name synonymous with the technological empowerment of India's vast network of Kirana (mom-and-pop) stores. His entrepreneurial voyage, which began in 2002, is a compelling narrative of resilience, strategic pivoting, and an unwavering focus on solving grassroots problems through innovation. ShopKirana, born in 2015, isn't just another e-commerce venture; it's a mission to bridge the colossal gap between millions of unorganized small retailers and large consumer brands, fundamentally reshaping India's B2B retail landscape.
For a deeper dive into Tanutejas's incredible journey, his early learnings, and the nuanced strategies behind ShopKirana's growth, don't miss his candid conversation on the Founder Thesis podcast.
Check out the video of the conversation here or read on for insights.
🌱 The Entrepreneurial Seed: Early Ventures and Hard-Earned Lessons
Tanutejas Saraswat's entrepreneurial spirit was ignited long before ShopKirana. His journey started as early as 2002, marked by ventures that provided crucial, albeit sometimes harsh, lessons. He even mastered the art of selling while still in school, trying everything from selling wallpapers door-to-door.
Among his initial ventures was Napster Era, a new-age media agency he founded in October 2010, focused on connecting brands with customers. This four-year stint likely offered invaluable insights into brand marketing and customer acquisition.
"The hustle the kind of work I did in the first one or two years, in Napster era, I I I I didn't hustle in the same way for the same people for the rest of the my life. So I just worked for the two years. I created a long lasting relationship and then they became the cash cow."
He also co-founded PaintLyfe.com in January 2012, a marketplace for artists to sell digital arts converted from real paintings. Reflecting on these early endeavors, Tanutejas shared a critical realization:
"Again I realized that, okay, this is not scalable."
This hard-earned lesson about the critical importance of scalability became a cornerstone of his future endeavors. These early experiences, though not achieving large-scale success by his own admission, were instrumental in shaping his understanding of market dynamics and the foundational principles he would later apply to ShopKirana. He honed his client servicing skills, often going above and beyond to deliver, even if it meant venturing into unfamiliar territories.
"I always used to go to the clients, and I always used to, like, pitch whatever, like, the thing can be sold. So it's never about that if I don't sell the ERP. I never, like, like, saw the ERP in my life, but I sold any ERP."
💡 The Spark: Identifying the Kirana Challenge & an Unlikely B2C Precursor
The genesis of what would become the B2B giant ShopKirana had an interesting precursor. While grappling with the scalability of PaintLyfe, Tanutejas experimented with an e-grocery model for consumers, coincidentally also named "ShopKirana" around nine years prior to the podcast.
"The model was very simple. I, I used to buy from Walmart, and, I used to sell everything on my website... I add maybe, like, five to ten percent of the margin on those product, and then you used to deliver the product, products to, like, this, homes."
This B2C venture was a profitable, bootstrapped effort, achieving around ₹50 lakhs in annual revenue and even expanding to 5,000 customers in Indore. However, Tanutejas realized his true competition wasn't other online players, but the sheer density of India's 9 million Kirana stores.
The pivotal shift towards the B2B model came through a serendipitous connection. A client for his Napster Era agency, who later became his co-founder Deepak Dhanotiya, painted a vivid picture of the "unaddressed woes of kirana stores". Deepak, whose father owned a Kirana store, had an intimate understanding of the "agony of managing inventory" and the operational inefficiencies plaguing small retailers. Simultaneously, co-founder Sumit Ghorawat, during his tenure at Procter & Gamble, observed the protracted 10-15 day lead times Kirana stores faced for stock replenishment.
It was Deepak who articulated the colossal B2B opportunity:
"He opened the notebook, he draw the diagram of an entire retailer, and he said, this is a six hundred billion dollar market. Ninety two percent market is controlled by the mom and pop store... And the biggest problem of this market is no one is focusing on connecting the Kirana store with the brands. Everyone is focusing on connecting to people like you sitting at home, and it really stuck my mind."
This powerful insight, shared around mid-2014, resonated deeply with Tanutejas. The mission crystallized: empower these retailers rather than compete with them.
"I think within, like, five minutes, I got convinced... And as entrepreneur, I like, within five minutes, I said done. I'm going to get this done."
He promptly decided to shut down all his other operations to go all-in on this new vision.
🚀 Founding ShopKirana: A Mission to Empower Millions
ShopKirana E-Trading Pvt. Ltd. was officially co-founded in early 2015 and registered in December 2014. Headquartered in Indore, Madhya Pradesh, the founding team was a blend of complementary expertise:
Tanutejas Saraswat (Co-Founder & CEO): Leading marketing, growth, and people operations, bringing his entrepreneurial grit and early learnings. His academic background includes a degree from Bikaner University and attendance at Proton Business School in Indore.
Sumit Ghorawat (Co-Founder): Overseeing business development and fundraising. His experience at Procter & Gamble and education from Carnegie Mellon University and BITS Pilani Dubai provided crucial insights into FMCG supply chains.
Deepak Dhanotiya (Co-Founder): Managing supply chain and operations. His background includes roles at P&G and Cummins, and critically, his father's Kirana store gave him unparalleled empathy for retailer pain points.
Tanutejas highlighted a key reason for partnering with Deepak:
"He was the only person who offered me the knowledge instead of the money or the, like, other language thing."
ShopKirana's vision is "To empower Indian retailers with power of technology and supply chain innovation". The mission is to equip retailers with the latest technology, improve their profitability and productivity, and bridge the gap between them and large consumer brands. His commitment was total:
"It took me, less than one day to decide that I'm not going to, like, run any other things. So what are the savings I have? I'll be running on all the money, but I'm not going to... let any other thing run..."
🎯 The Indore Advantage: Mastering Tier-II Dynamics
A crucial strategic decision was basing ShopKirana in Indore, Tanutejas's early connection point, rather than a traditional metro startup hub.
"Indore is the place where the action is."
This choice offered:
Lower operational costs.
Less initial competition for talent focused on this niche.
Direct immersion into Tier-II city dynamics, which became their primary focus. This was critical because the Kirana market in these smaller urban centers is often more unorganized and underserved.
Tanutejas elaborated on the market realities differentiating Tier-II from Tier-I:
"If you, bring any balance sheet or P&L account of any, ecommerce organization, So you you're gonna see that eighty percent of the revenue of these companies are coming from the top two cities maximum, and rest, twenty percent is coming from the rest of the twenty cities. Right? So what we realized that this is not the scale a businessman would do in his life because there's a cost involved."
ShopKirana's deep understanding of and commitment to Tier-II markets, where they claim 30% consumer reach through their retailer network, became a significant differentiator.
📈 Building the Behemoth: Growth, Funding & Milestones
ShopKirana's journey has been one of strategic growth, significant funding, and impactful market penetration.
Funding Trajectory: ShopKirana has successfully raised a total reported in the range of $50 million to $58 million. Key funding rounds include:
Angel/Seed (2015-2016): Backing from Incubate Fund, Lead Angels Network, and notable angel investors like senior VPs from Samsung and Cadbury.
Series A (Dec 2018): $2 million led by Info Edge, with participation from AET Fund, Better Capital, and existing investors.
Series B (Aug 2019): $10 million, again with Info Edge, Incubate Fund, Akatsuki, and others, aimed at Tier-II expansion.
Series C (Jan 2022): $38 million - $45.1 million co-led by Info Edge, Oman India Joint Investment Fund, and Sixth Sense Ventures, valuing the company at approximately $150-$160 million.
The consistent backing from Info Edge, a prominent Indian tech investor, underscores strong conviction in ShopKirana's model. Tanutejas, however, maintains a grounded perspective on fundraising:
"As a, like, founders, we also believe that, raising investment should not be celebrated. So it's like you are proving that you are unable to, like, generate a profit from your company so that you need to sell your own equity."
Revenue & Profitability Focus: ShopKirana demonstrated impressive early revenue growth, starting from ₹12 crore after its first year (circa 2016) and increasing this tenfold over the subsequent four years. Recent financial performance indicates a strategic shift:
FY22 Gross Revenue: ₹452 crore
FY23 Gross Revenue: ₹682 crore (a 51% YoY increase), with losses widening to ₹79 crore.
FY24 Gross Revenue: ₹639.16 crore (a 6.26% YoY decrease), but significantly, losses narrowed by 30.5% to ₹55.25 crore. During the podcast, Tanutejas mentioned ShopKirana achieving over ₹500 crore in sales.
This FY24 trend suggests a pivot from aggressive growth towards operational efficiency, unit economics, and a clearer path to profitability, a common trajectory for maturing startups in challenging sectors. The company has aimed for city-level EBITDA profitability, reportedly achieving regional profitability.
Network Expansion & Market Reach:
From 2,000 retailers connected to 23 brands within five months of launch.
Currently, ShopKirana empowers 50,000 active Kirana stores across its operational cities (as of December 2023).
The broader ecosystem includes over 1 lakh network participants (retailers, wholesalers, dealers, etc.).
Operates in 15 cities as of 2023, primarily Tier-II, after initially proving the model in 3 cities and later expanding to 8 cities across 4 states.
The team has grown to over 1,000 people.
💡 Innovation at its Core: ShopKirana's Value Proposition
ShopKirana's competitive edge is built on several pillars:
Technology-Driven B2B Platform: A sophisticated mobile app allows retailers to order, manage inventory, and make payments, directly connecting them to brands and streamlining procurement. The focus was always on user-friendliness for a non-tech-savvy audience:
"A mobile application should be faster than writing on a piece of paper. So we came up with this thought process that three click three click."
Supply Chain Innovation & Asset-Light Model: Drastically reduced stock replenishment times from 10-15 days to 24-48 hours. This is achieved by operating an on-demand pick-and-drop model without owning inventory, supported by strategically located fulfillment centers, and optimizing logistics with multi-brand deliveries.
Kisan Kirana - The Private Label Success Story: A significant innovation is their proprietary food brand, Kisan Kirana (products like flour, spices, pulses). This became a ₹100 crore profitable brand across just 10 cities, contributing about 10% to ShopKirana's business and improving margins.
Financial Services: Integrated lending and credit facilities, offering working capital loans from ₹25,000 to ₹40 lakh and 14-day interest-free credit for app purchases.
The "Replicate Model": A crucial innovation for scaling. ShopKirana developed a playbook enabling them to launch operations in new Tier-II cities within just 7 days with a lean team of 2-3 people, aiming for consistent unit economics achieved in their home base of Indore.
ShopKirana Direct: This feature allows traders to connect directly with retailers on the platform for certain commodities and brands, with ShopKirana facilitating the connection and earning a commission (0.5% to 10%), while logistics may be handled by the traders themselves. This model saw rapid adoption, contributing significantly to GMV in cities like Jaipur.
Understanding the retailer's trust-based ecosystem was key:
"A retailer actually is dependent on the distributor because he know the distributor personal level. That's why he is connected. A retailer don't, switch pricing... Retailer he don't trust you [initially]."
👨🚀 The Captain: Tanutejas Saraswat's Leadership Philosophy
Tanutejas's leadership is defined by a pragmatic yet people-centric approach. His LinkedIn summary states:
"I'm on a journey to impact the $500Bn trade market between 9mn + small mom pop stores & consumer brands with the power of technology which is made by people. An Entrepreneur since 2002. Passionate about people, businesses & crazy, scary & highly scalable ideas. I Believe the world is a people game & the ones who understood it sooner, impacted it faster."
People-Driven and Retailer-Centric: He champions "people-driven businesses" and a "retailer-centric organization," fostering trust with a traditionally non-tech-savvy base.
Execution & Speed: A strong believer in robust execution and speed, with an organizational emphasis on "action vs. discussion" and getting from "idea to invoice" quickly.
"When you actually go any speed and, get the success, you actually give no time to the competitor to understand what really happened."
Learning from Failure & Resilience: His own journey, marked by early unscalable ventures, has instilled a philosophy of learning from mistakes and maintaining resilience. He emphasizes that if you fail, "fail very fast" to iterate quickly.
Team & Co-founder Synergy: The ShopKirana founding team operates with a clear division of roles, leveraging individual strengths. Tanutejas detailed this:
"So I handle the execution. I go to the city. I launch. I keep the retailer. I keep the business, and I know I have created a whole, like, structure and organized structure... And once at certain level, I give the whole structure to Deepak, who handles the operation the day to day, and his job is to, make it a sustainable... eliminate the mess, which I've created..."
His personal vision extends to impacting the $500Bn trade market between 9mn+ small mom-and-pop stores and consumer brands. He actively shares his insights on LinkedIn under the username 'tanutejas'.
🧭 Navigating Headwinds: Challenges and Future Aspirations
ShopKirana operates in a dynamic and competitive environment, facing challenges from other B2B players like Udaan and Jumbotail, traditional distributors, and the B2B arms of e-commerce giants, as well as the rise of quick commerce. The recent focus on profitability, even with a slight dip in top-line revenue in FY24, indicates a strategic move towards sustainable growth and operational excellence.
The long-term vision remains ambitious: to empower millions of Indian retailers, potentially reaching over 9 million stores, and to build a comprehensive digital ecosystem connecting all stakeholders in the supply chain. This includes continued expansion into Tier-II and Tier-III cities, enhancing platform features with predictive analytics, diversifying product offerings, and further expanding financial services.
Tanutejas Saraswat's journey with ShopKirana is a powerful testament to understanding deep-seated market inefficiencies and leveraging technology, strategic innovation, and a people-first approach to build a business of significant scale and impact. From the early days of experimenting with "unscalable" ideas to leading a retail-tech powerhouse, his story is one of continuous learning and relentless execution.
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