Citymall Secures $47M to Take on Ultra-Fast Delivery Giants
▼ Summary
– Citymall raised $47 million in Series D funding led by Accel, with participation from existing investors, bringing its total funding to $165 million.
– The company’s valuation remains flat at $320 million, reflecting a previous bullish market environment, despite its growth over the past three years.
– Citymall targets value-conscious customers in tier 2 and 3 towns with planned grocery purchases, offering lower prices and no delivery fees, unlike quick-commerce competitors.
– The startup operates in 60 cities and focuses on private labels, supply chain efficiencies, and community leaders for fulfillment to reduce costs and margins.
– Despite operational profitability, Citymall reported negative EBIDTA margins and faces competition from quick-commerce platforms, which are projected to capture significant e-commerce market share.
Indian e-commerce startup Citymall has successfully raised $47 million in a Series D funding round, reinforcing its mission to serve value-focused grocery shoppers in smaller cities. The investment was spearheaded by Accel, with strong backing from existing supporters such as Waterbridge Ventures, Citius, General Catalyst, Elevation Capital, Norwest Venture Partners, and Jungle Ventures.
This latest funding arrives three years after the company’s previous $75 million Series C, led by Norwest Venture Partners. Despite steady growth, Citymall’s valuation has held steady at $320 million. Sources close to the matter indicate that investors applied a multiple of roughly four times the company’s revenue from the past year. To date, the startup has amassed a total of $165 million in funding.
Investors acknowledge that the earlier valuation was shaped by a more bullish market climate. Still, they express confidence in Citymall’s strategic direction and long-term potential.
Pratik Agarwal of Accel emphasized the significance of the investment, stating, “We have supported Citymall since Series A and are increasing our commitment because we believe online grocery, especially the value segment, represents India’s largest consumer market.”
The funding announcement arrives amid intense competition in India’s quick-commerce sector, where players like BlinkIt, Zepto, Swiggy Instamart, and BigBasket are racing to deliver orders in minutes. Citymall is charting a different course by targeting planned, bulk grocery purchases rather than instant needs. The platform offers around half the product variety of a typical quick-commerce app but twice that of a local value store.
CEO Angad Kikla explained, “Online grocery penetration remains low in India, and most shoppers are highly conscious of value. We aim to serve that segment, positioning ourselves as the digital equivalent of Dmart.”
Founded in 2019, Citymall initially relied on community leaders for marketing, order-taking, and last-mile delivery. The model proved especially useful during the early pandemic, as many new online grocery shoppers needed hands-on support. The company has since refined its approach, using community leaders primarily for fulfillment to boost efficiency and cut costs.
A core part of Citymall’s strategy involves developing private labels and forging direct partnerships with manufacturers. This allows the company to offer lower prices while maintaining healthier margins through supply chain and operational improvements. Unlike quick-commerce services, Citymall does not impose handling or delivery fees and typically delivers within a day, catering to customers who prioritize savings over speed.
The platform’s primary users earn between ₹15,000 and ₹80,000 per month, with an average order value of ₹450–500. Citymall currently serves 60 cities, including Delhi NCR, Uttar Pradesh, Haryana, Bihar, and Uttarakhand, and plans to expand into adjacent markets to maximize warehouse utilization.
Although the company has demonstrated consistent business growth, it reported negative EBIDTA margins exceeding 30% in the last financial year. Citymall claims operational profitability but has not specified a timeline for achieving full profitability.
The grocery sector remains fiercely competitive, with pressure from local stores, online platforms, and quick-commerce providers. According to Bloomberg Intelligence, quick commerce could capture 20% of India’s e-commerce sales by 2035.
Manish Kheterpal of Waterbridge Capital, a repeat investor in Citymall, highlighted the company’s operational advantages. “Quick commerce thrives on impulse buying, but Citymall serves users who order essentials a few times a month. By sourcing directly and leveraging community networks, they achieve low distribution costs and solid gross margins.”
Bernstein Research notes that food and grocery dominate India’s retail landscape, which remains largely unorganized. The firm projects that online grocery will constitute 12% of e-commerce sales by year-end.
Redseer analysis indicates that quick-commerce services face higher per-order costs outside major metros. Citymall believes its model, combining lower fees, reduced product costs, and economical delivery, will appeal to value-conscious shoppers and support scalable growth.
(Source: TechCrunch)
