Shopkirana, a business-to-business grocery firm, has raised $38 million from investors including Info Edge, Oman India joint investment fund, Sixth Sense Ventures, and others.

Trifecta, Incubate Fund, Akatsuki, Ajanta LLP, Gunosy Capital, and others also participated in the round.

ShopKirana works directly with brands, providing them with market knowledge and a boost in distribution. It now has 50,000 kirana outlets in eight cities spread over four states: Madhya Pradesh, Uttar Pradesh, Rajasthan, and Gujarat.

The startup, which was founded in Indore in 2015, claims to be the first to sell groceries directly to merchants from brands. Big, well-funded enterprises like Udaan, Jiomart, Flipkart, Amazon, and Jumbotail are now vying for market share.

But, according to ShopKirana cofounder Sumit Ghorawat, the company has perfected a methodology that allows it to start in a new location every 15 days.

Deepak Dhanotiya, Sumit Ghorawat, and Tanutejas Saraswat, all previous executives in the consumer products industry, created the company. Shopkirana, according to Ghorawat, is the first company in the sector to break even in terms of operations.

“With the right product-market fit and considering the heavy adoption from kirana stores, legacy consumer goods brands and direct-to-consumer or D2C brands, we are super excited to take the business to a national scale," Ghorawat added.

After conducting a test in Mumbai and Indore, the company opted to focus on tier-2 cities such as Indore after seeing that the market in smaller cities was more unorganised.

“We became super focussed on tier-2 and for the first three years, we kept our head down and made sure we have strong product-market fit and unit economics. We are the first company to hit operational break-even in the segment.”

The degree to which a product meets significant market demand is known as product-market fit. The company takes the strategy of'solve first, scale afterwards,' rather than the other way around, as most of the big companies do.