 Morning Dispatch |
Citykart’s big haul; A new AI race
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Happy Tuesday! Value fashion retailer Citykart has raised fresh funds to fuel its expansion plans. This and more in today’s ETtech Morning Dispatch.
Also in the letter:
■ Flipkart’s growth charge
■ Earnings corner
■ Agentic AI in BFSI
Sudhanshu Agarwal, founder, Citykart
Citykart, a value retail chain serving middle- and lower-income consumers in smaller Indian cities, has raised Rs 538 crore in a funding round led by TPG NewQuest and A91 Partners. The mix of primary and secondary transactions pegs the company’s valuation at around Rs 1,400 crore, people familiar with the matter told us.
Deal details:
About the company: Citykart operates 137 stores across tier-II and tier-III cities, with plans to add 40–50 outlets annually in states like Rajasthan, Odisha, Assam, and Jharkhand.
Context setting: Citykart plays in the mass-market apparel segment alongside listed firms such as VMart and private players like Vishal Mega Mart and Style Baazar. The fresh round underscores growing investor appetite for affordable fashion targeting India’s non-metro consumers.
By comparison:
Homegrown pet food brand Drools turned unicorn after Swiss packaged food giant Nestlé SA acquired a minority stake for an undisclosed amount.
Hot cake: This is Drools’ second major raise after LVMH-backed private equity firm L Catterton invested $60 million in June 2023 at a valuation of $600 million. The transaction underscores rising investor interest in India’s $3.5 billion pet care market, with players like Godrej and Emami planning a foray.
Slikk raises $10 million: Bengaluru-based 60-minute fashion delivery startup Slikk has raised $10 million in a funding round led by Nexus Venture Partners.
A fresh front has opened in the AI wars, as global tech giants and nimble startups race to dominate the future of software development.
What’s happening:
Rapid adoption: Google and Microsoft say AI now writes around 30% of their code. At InMobi, founder Naveen Tewari claims the figure is already 50%. The AI coding tool market is projected to reach $12.6 billion by 2028, growing at a CAGR of 28%, according to market intelligence firm MarketsandMarkets.
The draw? A compelling mix of higher productivity, intuitive interfaces, and strong value-for-money.
Challenges: But, as AI writes more code, teams are left reviewing more of it. Several founders we spoke to said they’ve automated large parts of the review process to avoid any customer-facing fallout.
Why it matters: ETtech Top 5 and Morning Dispatch are must-reads for India’s tech and business leaders, including startup founders, investors, policy makers, industry insiders and employees.
The opportunity:
What’s next: Interested? Reach out to us at [email protected] to explore sponsorship opportunities.
Kalyan Krishnamurthy, group CEO, Flipkart
Flipkart group CEO Kalyan Krishnamurthy outlined the company’s growth trajectory and IPO plans at an internal town hall on Monday.
What’s new: Krishnamurthy told employees that Flipkart is seeing 20–25% year-on-year growth in orders across its platforms in May, with expectations of hitting 30% growth in June, defying a broader slowdown in the ecommerce sector.
Why it matters: The update comes as Flipkart prepares to shift its domicile from Singapore to India, aligning with domestic regulations ahead of a planned IPO in 2026.
By the numbers:
Zoom out: Krishnamurthy and top executives Ramesh Gururaja, Hemant Badri, and Seema Nair used the town hall to lay out priorities across supply chain, customer experience, and HR.
The group is also focusing on Gen Z consumers through fashion, travel, and Shopsy, its value platform competing with Meesho and Amazon Bazaar.
Supam Maheshwari, CEO, FirstCry
Brainbees Solutions, which operates omnichannel baby products retailer FirstCry, reported a consolidated net loss of Rs 111 crore in Q4 FY25, widening from Rs 43 crore in the year-ago period and Rs 15 crore in the previous quarter. Operating revenue stood at Rs 1,930 crore, up 16% year-on-year but down 11% sequentially.
Nitish Mittersain, CEO, Nazara Technologies
Online gaming firm Nazara Technologies posted a strong growth in the fourth quarter of FY25. The firm reported a 95% rise in operating revenue to Rs 520 crore, while net profit surged to Rs 4 crore from Rs 18 lakh in the year-ago period.
Sumit Lakhani, CEO, Awfis
Office space solutions provider Awfis recorded a 46% rise in operating revenue to Rs 339 crore for the March quarter, fueled by greater enterprise contributions, allied services, and better efficiency. Net profit rose ninefold to Rs 11.3 crore.
(L-R) Harsh Jain, Neeraj Singh, Lalit Keshre and Ishan Bansal, cofounders, Groww
Groww files draft papers for IPO, eyes $700 million to $1 billion listing: Online investment platform Groww has submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (Sebi) to launch an initial public offering (IPO), according to a public notice on May 25.
Financial services players use agentic AI to automate workflows: The BFSI sector, including players like HDFC Bank, State Bank of India (SBI), and Wells Fargo, is planning to leverage agentic AI to automate workflows intelligently.
■ How I shorted $TRUMP coin (and got to have dinner with the President) (The Verge)
■ Here are the nuclear fission startups backed by Big Tech (TechCrunch)
■ The real cost of AI is being paid in deserts far from Silicon Valley (Rest of World)
Also in the letter:
■ Flipkart’s growth charge
■ Earnings corner
■ Agentic AI in BFSI
TPG NewQuest, A91 back Citykart in Rs 538 crore round at Rs 1,400 crore valuation
Citykart, a value retail chain serving middle- and lower-income consumers in smaller Indian cities, has raised Rs 538 crore in a funding round led by TPG NewQuest and A91 Partners. The mix of primary and secondary transactions pegs the company’s valuation at around Rs 1,400 crore, people familiar with the matter told us.
Deal details:
- Rs 120 crore in fresh capital will fund expansion beyond Citykart’s core markets of Uttar Pradesh and Bihar.
- Rs 418 crore was raised via secondary share sales.
- Middle East-based alternative asset manager Investcorp has exited fully, clocking a 4x return on its 2019 investment.
- Another early backer, India SME Investments, has pared its stake by half.
About the company: Citykart operates 137 stores across tier-II and tier-III cities, with plans to add 40–50 outlets annually in states like Rajasthan, Odisha, Assam, and Jharkhand.
- Revenues have grown by nearly 70% over the last two financial years to over Rs 900 crore in FY25.
- Founder and MD Sudhanshu Agarwal said the company expects to cross Rs 1,300 crore in revenue in FY26, and noted that Citykart has remained consistently profitable for the last five years.
Context setting: Citykart plays in the mass-market apparel segment alongside listed firms such as VMart and private players like Vishal Mega Mart and Style Baazar. The fresh round underscores growing investor appetite for affordable fashion targeting India’s non-metro consumers.
By comparison:
- VMart, a listed peer, is valued at Rs 5,500–6,000 crore and has an annual revenue of Rs 2,300 crore (around 2.5x sales).
- Vishal Mega Mart, backed by Partners Group and Kedaara Capital, was last valued at nearly $1.3–1.5 billion (Rs 10,000–12,000 crore) with revenue exceeding Rs 7,000 crore.
- Style Baazar, a regional player, has a comparable store count but a smaller scale and revenues of around Rs 500-600 crore.
Pet food brand Drools turns unicorn after Nestlé SA picks up minority stake
Homegrown pet food brand Drools turned unicorn after Swiss packaged food giant Nestlé SA acquired a minority stake for an undisclosed amount.
Hot cake: This is Drools’ second major raise after LVMH-backed private equity firm L Catterton invested $60 million in June 2023 at a valuation of $600 million. The transaction underscores rising investor interest in India’s $3.5 billion pet care market, with players like Godrej and Emami planning a foray.
Slikk raises $10 million: Bengaluru-based 60-minute fashion delivery startup Slikk has raised $10 million in a funding round led by Nexus Venture Partners.
Operation Coding war, thanks AI
A fresh front has opened in the AI wars, as global tech giants and nimble startups race to dominate the future of software development.
What’s happening:
- Google has unveiled its coding agent Jules.
- Microsoft has launched its GitHub AI agent.
- OpenAI has rolled out Codex and acquired Windsurf to bolster its arsenal.
Rapid adoption: Google and Microsoft say AI now writes around 30% of their code. At InMobi, founder Naveen Tewari claims the figure is already 50%. The AI coding tool market is projected to reach $12.6 billion by 2028, growing at a CAGR of 28%, according to market intelligence firm MarketsandMarkets.
The draw? A compelling mix of higher productivity, intuitive interfaces, and strong value-for-money.
Challenges: But, as AI writes more code, teams are left reviewing more of it. Several founders we spoke to said they’ve automated large parts of the review process to avoid any customer-facing fallout.
Sponsor ETtech Top 5 & Morning Dispatch!
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The opportunity:
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What’s next: Interested? Reach out to us at [email protected] to explore sponsorship opportunities.
Flipkart reports up to 25% growth amid ecommerce slowdown
Flipkart group CEO Kalyan Krishnamurthy outlined the company’s growth trajectory and IPO plans at an internal town hall on Monday.
What’s new: Krishnamurthy told employees that Flipkart is seeing 20–25% year-on-year growth in orders across its platforms in May, with expectations of hitting 30% growth in June, defying a broader slowdown in the ecommerce sector.
Why it matters: The update comes as Flipkart prepares to shift its domicile from Singapore to India, aligning with domestic regulations ahead of a planned IPO in 2026.
By the numbers:
- India's ecommerce market growth slowed to 10–12% in 2024, per Bain & Company.
- Myntra accounted for 40% of the group’s new customers and turned profitable in FY24.
- Flipkart Minutes is targeting 800 dark stores by end-2025 and is doubling daily order volumes roughly every 45 days.
Zoom out: Krishnamurthy and top executives Ramesh Gururaja, Hemant Badri, and Seema Nair used the town hall to lay out priorities across supply chain, customer experience, and HR.
The group is also focusing on Gen Z consumers through fashion, travel, and Shopsy, its value platform competing with Meesho and Amazon Bazaar.
FirstCry’s Q4 loss widens to Rs 111 crore; full-year Ebitda improves
Brainbees Solutions, which operates omnichannel baby products retailer FirstCry, reported a consolidated net loss of Rs 111 crore in Q4 FY25, widening from Rs 43 crore in the year-ago period and Rs 15 crore in the previous quarter. Operating revenue stood at Rs 1,930 crore, up 16% year-on-year but down 11% sequentially.
Nazara Technologies Q4 revenue nearly doubles; net profit rises to Rs 4 crore
Online gaming firm Nazara Technologies posted a strong growth in the fourth quarter of FY25. The firm reported a 95% rise in operating revenue to Rs 520 crore, while net profit surged to Rs 4 crore from Rs 18 lakh in the year-ago period.
Awfis net profit rises nine-fold in Q4, revenue up 46%
Office space solutions provider Awfis recorded a 46% rise in operating revenue to Rs 339 crore for the March quarter, fueled by greater enterprise contributions, allied services, and better efficiency. Net profit rose ninefold to Rs 11.3 crore.
Other Top Stories By Our Reporters
Groww files draft papers for IPO, eyes $700 million to $1 billion listing: Online investment platform Groww has submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (Sebi) to launch an initial public offering (IPO), according to a public notice on May 25.
Financial services players use agentic AI to automate workflows: The BFSI sector, including players like HDFC Bank, State Bank of India (SBI), and Wells Fargo, is planning to leverage agentic AI to automate workflows intelligently.
Global Picks We Are Reading
■ How I shorted $TRUMP coin (and got to have dinner with the President) (The Verge)
■ Here are the nuclear fission startups backed by Big Tech (TechCrunch)
■ The real cost of AI is being paid in deserts far from Silicon Valley (Rest of World)
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