Jun 11, 2025

Sowmya Ramasubramanian 3 min read11 Jun 2025, 11:26 AM IST CityMall revamps delivery via local agents, improves margins, and doubles revenue. (Image: Pixabay) Summary Backed by Accel and Elevation Capital, CityMall has hit operational breakeven after reworking its group-buying model and tapping micro entrepreneurs across 60+ small Indian cities. Gift this article Subscribe to enjoy similar stories. Subscribe now BENGALURU : E-commerce startup CityMall has turned operationally profitable in FY25, following a major revamp of its grocery delivery model across tier-2 and tier-3 towns. The Gurugram-based firm, now active across 60 cities in Uttar Pradesh, Haryana, National Capital Region (NCR), hit breakeven after streamlining its supply chain and pivoting away from its original social commerce approach. Backed by Accel, Elevation Capital, and General Catalyst, CityMall has grown over 3x in the past 15 months and is currently doubling its revenue year-on-year, according to co-founder and CEO Angad Kikla. “We are now positive at the unit economics level. We are making money on every order through multiple iterations in our supply chain while building the cheapest possible grocery distribution channels," Kikla told Mint in an exclusive conversation. While absolute FY25 numbers are yet to be filed with the Ministry of Corporate Affairs (MCA), the company clocked ₹427 crore in revenue in FY24 with a loss of ₹159 crore—a 10% increase over the previous year, per Tofler data. Rethinking the model CityMall, founded in 2019 by Kikla and Naisheel Verdhan, was initially built around group-buying led by “community leaders"—local influencers who drove sales in their neighbourhoods. But this social commerce model was scrapped after the company faced scaling challenges. “We started in the pre-Covid era where fewer consumers were purchasing grocery and other goods online. At the time, our community leaders were tasked with generating demand in their respective clusters as well as facilitating fulfilment," Kikla said. But post-pandemic, the behaviour shifted. “We realised that everybody is using e-commerce. We don’t need to do the tough task of getting them on the platform through the micro entrepreneurs. Finding a way of delivering them with the best price is the most critical part in this category." To solve this, CityMall now works with local milkmen or shop owners in each cluster. Orders are delivered in bulk to these micro-entrepreneurs from centralised warehouses, and they handle last-mile fulfilment. This tweak has improved operational efficiency by at least 3x, Kikla noted. The company is currently in talks with investors—including existing backers like Accel—for a new funding round, possibly at a lower valuation. In March, it raised ₹50 crore in debt from Trifecta Capital and Alteria Capital. In total, CityMall has raised over $100 million, with its last major equity round being a $75 million Series C in March 2022 led by Norwest Venture Partners. Social commerce struggles to scale CityMall isn’t the only player to pivot. Some of the largest startups in the space have pivoted from the model owing to inherent structural and behavioural barriers. Bengaluru-based value e-commerce firm Meesho scaled down its community offering Superstore in 2022 as did Lightspeed-backed Udaan with its ‘Price Company’ vertical. DealShare, which raised nearly $400 million in total, has also moved to a hybrid model. Experts point to the fragmented nature of India’s consumer base. “High diversity in income levels, regional preferences, and technology adoption creates challenges in standardising or scaling group-based online models especially in price-sensitive markets like India," said Mit Desai, consumer and internet practice member at consulting firm Praxis Global Alliance. Offline stronghold Even as digital transactions surge across India, grocery shopping in smaller towns remains largely offline. “Despite the rise of 'shopcializing' (shopping influenced by community/friends), the actual transactions still skew towards individual rather than collective decision-making online," Desai said. According to him, the online shopper base grew rapidly until 2023 but is expected to slow between 2023 and 2027, with growth tapering to 10% CAGR from 24% earlier—due to metro saturation and slower adoption in smaller towns. Yet, Kikla remains optimistic. The company plans to deepen its presence in its existing markets and scale further in states like Bihar, betting on its revamped supply chain and cost-conscious execution.