**CityMall Achieves Operational Profitability with Grocery Model Revamp**
CityMall, an e-commerce startup based in Gurugram, has reached operational profitability in FY25 after significantly overhauling its grocery delivery model in tier-2 and tier-3 towns. The company, which operates in 60 cities across Uttar Pradesh, Haryana, and the National Capital Region (NCR), achieved breakeven by optimizing its supply chain and moving away from its initial social commerce strategy. Supported by investors such as Accel, Elevation Capital, and General Catalyst, CityMall has experienced over threefold growth in the past 15 months and is currently doubling its revenue year-on-year, according to co-founder and CEO Angad Kikla.
Kikla shared insights on the company’s financial health, stating, “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.” Although the official FY25 financial figures have yet to be submitted to the Ministry of Corporate Affairs, the company reported ₹427 crore in revenue for FY24, with a loss of ₹159 crore, reflecting a 10% increase from the previous year, as per Tofler data.
**Rethinking the Business Model**
Founded in 2019 by Kikla and Naisheel Verdhan, CityMall initially focused on a group-buying model driven by “community leaders”—local influencers who facilitated sales in their neighborhoods. However, this social commerce approach was abandoned due to challenges in scaling. Kikla explained, “We started in the pre-Covid era when fewer consumers were purchasing groceries and other goods online. Our community leaders were responsible for generating demand and fulfilling orders in their clusters.”
Post-pandemic, consumer behavior shifted dramatically. “We realized that everyone is using e-commerce. We don’t need to rely on micro-entrepreneurs to bring them onto the platform. The key is to deliver the best prices,” Kikla noted. To enhance efficiency, CityMall now collaborates with local milkmen and shop owners in each area. Orders are sent in bulk to these micro-entrepreneurs from centralized warehouses, who then manage last-mile delivery. This adjustment has reportedly improved operational efficiency by at least three times.
CityMall is currently in discussions with investors, including existing backers like Accel, for a new funding round, potentially at a lower valuation. In March, the company secured ₹50 crore in debt from Trifecta Capital and Alteria Capital. To date, CityMall has raised over $100 million, with its last significant equity round being a $75 million Series C in March 2022, led by Norwest Venture Partners.
**Challenges in Social Commerce**
CityMall is not alone in its pivot; several major startups in the sector have also shifted away from the social commerce model due to inherent structural and behavioral challenges.
**FAQ**
**What is CityMall’s new grocery delivery model?**
CityMall has transitioned from a social commerce model to a more efficient grocery delivery system by partnering with local shop owners and milkmen for last-mile fulfillment, significantly improving operational efficiency.
