Sejal Singh B G,
Copy Editor, Startupcity

• Traditional retail giants like Reliance, Flipkart, and Aditya Birla Group are acting as silent co-founders of Indian e-commerce startups, providing capital and operational support.

• Investments and strategic partnerships are boosting sectors like quick commerce, social commerce, D2C personalization, and sustainability-focused startups.

• Founders leverage these collaborations for faster market entry, cost efficiency, and growth, while navigating challenges like decision cycles and exclusivity clauses.

There is a strategic shift in the e-commerce ecosystem of India, with the traditional retail giants such as Reliance, Flipkart and Aditya Birla Group shifting away to be mere spectators and instead to act as 'Silent Co-Founders' of the newly born startups. These conglomerates are not merely contributing capital, but actively influencing the direction of growth of fledgling digital-first enterprises by bringing their operational capabilities, distribution channels and brand equity to bear on the direction of growth. “There is now greater confidence in the fundamentals of the companies getting created. If you look at traditional Indian businesses from the last few decades like Asian Paints, HDFC Bank or Titan, they have compounded year after year, decade after decade, this is for the first time, we feel that there are some companies in our technology ecosystem that can reach that level of maturity”, says Mukul Arora, Co-founder & Managing Partner, Elevation Capital.

Recent moves highlight this trend: in June 2025, Flipkart sold a 6 percent stake in Aditya Birla Fashion and Retail Ltd (ABFRL) worth Rs 588 crore, which was part of a wider portfolio rearrangement, marking a major change in the e-commerce space in India. This follows the 2020 acquisition of a 7.8 percent stake in ABFRL by Flipkart, in exchange of 1,500 crores, in a move that will enhance the omni-channel capabilities and digital presence of ABFRL. Meanwhile, to scale its digital first lifestyle brands, Aditya Birla Group venture arm, TMRW, has invested Rs 290 crore in eight of them. Likewise, the GenNext Ventures of the Reliance is developing startups, including Covascis, Ecorithim, and Videonetics and offering them exposure to its extensive retail and digital ecosystem. While Flipkart has created a platform called Shopsy, which enables micro-entrpreneurs to start their own online business, which is the future of collaborative growth.

Such strategic initiatives are reshaping the image of Indian startups to make the traditional competition strategic allies and role models of the new generation of e-commerce brands. Through an effort to combine investment with practical operational direction, these retail powerhouses are creating a more cohesive, robust, and future-proofed e-commerce ecosystem. Let’s discuss more on this topic of how retail giants are becoming silent co-founders of e-commerce startups.

Funding Momentum

The venture capital (VC) environment in India has shown a sharp improvement, and the investment amount has hit up to 13.7 billion dollars during the fiscal year 2024- 25. It is worth noting that much of this capital was raised by consumer technology startups, which received $5.4 billion. This growth has been led by quick commerce and direct-to-consumer (D2C) models as consumers have shifted behaviour to faster delivery and customised experiences.

This has been further enhanced by policy reforms. Angel taxation reduction, long-term capital gains (LTCG) tax reduction and simplified Foreign Venture Capital Investor (FVCI) registration mechanisms have opened up 10.4 billion in 95 funds. Such developments have given more confidence to both investors and entrepreneurs and this has created a more favorable climate to startup businesses.

Also Read: Venture Capital from Capitalists: Empowering Budding Minds & Elevating their Innovative Ideas

Operational Advantages

Startups have a great advantage because the operational support offered by these retail giants is very important although funding is essential. Go-to-market strategies based on existing logistics systems, omnichannel retail outlets, and advanced levels of personalization combined with AI can make a startup go to the market up to 50 percent faster. These resources also have the ability to lower the operations costs by 25-30 percent, which allows startups to grow efficiently and effectively.

Indicatively, Jumbotail, a Bengaluru-based B2B marketplace of food and grocery has used this kind of support to remake retail supply chains using tech-led innovation. Jumbotail, which has just received a recent Rs 1,000 crore ($120 million) funding round, is not just scaling at a very fast rate, but also enabling smaller businesses to fight and thrive in this new-age economy.

Hot Investment Sectors

Quick commerce is surging, with $2.8 Billion in major July deals and Zepto’s expansion through CVC partnerships driving an 82 percent jump in deal value. Social commerce and D2C platforms are thriving, exemplified by Meesho raising $200 Million from L Catterton (Birla-backed), leveraging its 500M+ social user base. Sustainability-focused investments are rising, as Reliance backs eco-packaging startups and dark stores shift toward EV logistics, reflecting 60 percent of green e-commerce deals. Cross-border funding is also strong, with the $1 Billion US-India Alliance (Accel, Premji Invest) channeling $300 Million into AI-driven logistics and other e-commerce deep tech. With over 140 deals in 2023, e-commerce is projected to capture 40 percent of retail by 2030. The focus areas for investment are evolving, with several sectors gaining prominence:

• Quick Commerce: Platforms offering rapid delivery services are attracting significant attention.
• Social Commerce: Leveraging social media platforms to drive sales is becoming increasingly popular.
• D2C Personalization: Brands focusing on personalized customer experiences are on the rise.
• Sustainability: Startups emphasizing eco-friendly practices, such as eco-packaging, are gaining traction.
• Cross-Border E-Commerce: Platforms facilitating international trade are expanding their reach.
• Deep Tech: Innovations in artificial intelligence, machine learning, and other advanced technologies are at the forefront.

These sectors align with the strategic interests of retail giants, who are keen on integrating innovative solutions into their operations.

“Investors are rooting for an approach that is more structured, institutionalised and professionally executed. Earlier, investors would give much more leeway to the founders for the first one year, which is no longer the case”, says Ankur Pahwa, Managing Partner, PeerCapital.

Also Read: Top 10 IT Startup Courses for Budding Entrepreneurs in India

Notable September 2025 Deals

Several significant investments and collaborations have taken place recently:

• Flipkart Ventures: Launched the Leap Ahead 4.0 program, offering equity investments of up to $500,000 to early-stage startups, along with mentorship from Flipkart leaders and industry experts.
• Reliance: Integrated Jumbotail's logistics capabilities, enhancing its supply chain efficiency and reach.
• US-India Alliance: Invested $300 million in AI logistics startups, aiming to revolutionize supply chain operations.

These deals highlight the growing trend of strategic partnerships between established retail giants and emerging startups.

Founder Challenges

While the support from retail giants is invaluable, founders face certain challenges:

• Longer Decision Cycles: Corporate venture capital (CVC) arms often have extended decision-making processes, ranging from 4 to 7 months.
• Exclusivity Clauses: Some agreements may limit a startup's ability to collaborate with other partners.
• Acquisition Pressures: Startups may face pressure to be acquired, potentially stifling their growth and autonomy.
• Tier-II/III City Startups: Founders in smaller cities may experience slower funding processes due to limited access to capital and networks.

Navigating these challenges requires careful planning and strategic decision-making.

Actionable Founder Strategies

To leverage the support of retail giants effectively, founders can consider the following strategies:

• Align Pitches with CVC Pain Points: Tailor business proposals to address the specific challenges faced by corporate investors.
• Leverage Accelerators: Programs like Antler India offer mentorship, funding, and networking opportunities that can be invaluable for early-stage startups.
• Increase LinkedIn Visibility: Building a strong online presence can attract the attention of potential investors and partners.
• Consider Hybrid Funding Models: Combining corporate venture capital with angel investors can provide a balanced approach to funding and support.

By adopting these strategies, founders can enhance their chances of success in a competitive startup ecosystem.

Conclusion

The changing role of retail giants in the Indian e-commerce Startup ecosystem indicates a transition in the growth towards collaborative growth. Companies such as Reliance, Flipkart and Aditya Birla Group are not only contributing capital but also with expertise and resources in terms of operation. This symbiosis relationship is not only beneficial to established companies, but also to the startups, which add to the innovation and growth pace of the Indian e-commerce market.