Hey there, tech lovers! Today, let’s talk about an exciting development in India’s online grocery scene.

Citymall, a budding e-commerce startup, announced it has secured $47 million in Series D funding, led by Accel. The company specializes in budget-friendly grocery delivery designed for smaller cities like Delhi NCR, Uttar Pradesh, Bihar, Haryana, and Uttarakhand.

Founded in 2019, Citymall’s initial strategy involved community leaders in various cities to promote and fulfill orders, especially during the early days of the pandemic. Later, they optimized their approach by focusing solely on fulfillment through local community leaders, reducing operational costs.

Their plan is to build strong private labels and partner directly with manufacturers, allowing them to offer goods at prices lower than competitors, with minimal delivery or handling fees. Unlike rapid-fire quick commerce startups, Citymall delivers within a day, targeting value-conscious customers who plan their grocery needs.

Their primary users tend to earn between ₹15,000 and ₹80,000 monthly, roughly $170 to $910, with average orders valued between $5 and $6. Operating across 60 cities, they aim to expand to nearby markets using their existing warehouses.

Despite consistent growth over three years, Citymall reported over 30% negative EBITDA margins last year. They are profitable on an operational basis but haven’t yet set a timeline for overall profitability. The focus remains on serving lower-cost groceries and building economies of scale for better margins.

Citymall’s model offers an alternative to quick commerce giants like BlinkIt, Zepto, and Swiggy Instamart. The startup believes its lower costs and delivery fees make it appealing to consumers in Tier 2 and Tier 3 cities, who prefer planned shopping over impulse buys. Their strategy hinges on lower per-order costs in less metro-centric markets, according to analysts and investors.

Analysts project online grocery sales in India will reach 12% of e-commerce by the end of this year, with quick commerce set to capture 20% of e-commerce sales by 2035. Citymall’s approach aims to carve out its niche by focusing on affordability and efficiency.

So, with this fresh funding, Citymall is poised to grow further and challenge the rapid growth of super-fast grocery delivery services, especially in regions that aren’t metro hubs. It’s a promising sign for consumers eager for lower-cost, convenient grocery options.