Startup Street: Making Life Easier For Kirana Store Owners

This week on Startup Street, a startup that is helping small mom-and-pop stores procure goods easily and manage their inventory better. India’s largest government-backed startup incubator is now turning an angel investor. And the taxman follows up on the finance minister’s promise of setting up a special cell to address startup’s tax-related problems. Here’s what went on:

Jumbotail Is Using Tech To Fix Supply Chain Gaps

Bheraram has been running a grocery store in Koramangala, a commercial hub Bengaluru, for 16 years. Almost each morning, he’d tediously travel about 25 kilometres to the nearest wholesale market to procure commodities for his shop. For household supplies, he’d rely on the erratic distribution networks of consumer goods companies.

But life has been much easier for him in the past three years. What changed? Bheraram signed up with Jumbotail.

The Bengaluru-based startup is helping hundreds of kirana store owners like Bheraram procure staples and consumer goods through their mobile application. Retailers get their delivery at the storefront within 24 hours from Jumbotail’s own logistics. Besides, owners can also track their store inventory through the app helping them avoid stock-outs.

“We are organising a highly unorganised sector of the economy,” Ashish Jhina, co-founder and chief operating officer of the startup, told BloombergQuint. “The biggest supply chain gaps in India are a highly fragmented producer base, many layers of intermediaries, lack of infrastructure in warehousing, and the lack of logistics infrastrucutre to move goods at scale. In any case, even if infrastructure is available, there is no tech leverage.”

Jhina, a third-generation apple farmer, was already familiar with the supply-demand mismatch in the food market. He met Karthik Venkateswaran, who previously worked with eBay and Flipkart, during their MBA at Stanford University. Together they launched Jumbotail in November 2015 and started operations in April next year.

Jumbotail works as an end-to-end service provider. It connects customers with consumer goods makers and farmer organisations through their app, which is also available in four languages as of now. The startup then uses its own network of fulfilment and distribution services, along with its last mile delivery fleet to get the supplies to the storefront.

Jumbotail’s marketplace also eliminates information asymmetry as it aggregates supply and demand data for both store owners and producers, Jhina said, adding that it helps significantly improve economic outcomes for brands and kirana store owners.

The startup even helps kirana stores modernise through point-of-sale integration and AI-driven merchandising. It also extends a credit line to kirana store owners through the lending partners on its platform.

Jumbotail is currently only operational in Bengaluru and Tumkur. They have about 2 lakh square feet of warehousing space, including eight distribution centres in the region.

Jhina said the startup is in a “rapid growth” phase and well on track to hit operational profitability in the next quarter. It has raised $23 million from its investors—the latest being a Rs 90 crore Series B round in June. Marquee investors include Kalaari Capital, Nexus Venture Partners and BNK Ventures.

“We have perfected wholesale e-commerce for food and grocery in the Bangalore region,” Jhina said. “Our systems and processes are learning and getting better every day using the data we are generating about the business and market.”

The startup aims to expand their business in up to 10 cities over the next three to five years.

Telangana To Become Angel Investor

Telangana’s T-Hub incubator announced the launch of its funding programme T-Angel, a joint venture with the state government, to enable early-stage startup investment ecosystem.

T-Hub is a public-private partnership project of the state government for startups.

T-Angel will be executed by T-Hub and online investment platform LetsVenture, an official release said on Thursday. It is a three-month investment acceleration program wherein as many as 30 startups in healthcare, real estate, entertainment, sports, education and finance will be shortlisted.

The program for the first batch of chosen startups will commence on Oct. 20, it said.

“T-Angel is a joint initiative by Telangana government and T-Hub to create a robust investment ecosystem for the state,” Ravi Narayan, chief executive officer of T-Hub, said in the statement. “Program will speed up startups collaborations with investors across the world with support from LetsVenture.”

Government Creates Startup Cell

The Central Board of Direct Tax notified the creation of a five-member special cell to address grievances of startups with relation to angel tax and other tax-related issues.

“The cell will work towards redressal of grievances and mitigate tax-related issues in case of startup entities with respect to administration of Income-tax Act, 1961,” the CBDT said.

Finance Minister Nirmala Sitharaman had, during a press conference last week, announced creation of such a cell in the CBDT. Sitharaman had said that startups registered with the Department for Promotion of Industry and Internal Trade will be exempted from angel tax.

“Startup entities can approach the cell for speedy resolution of their grievances. This initiative is the latest amongst the recent initiatives taken by the CBDT to further ease the compliance issues pertaining to startups,” a CBDT spokesperson told PTI.

Startups can approach the cell at:

• Email: startupcell.cbdt@gov.in
• Postal Address: Office of Under Secretary, ITA-I, Room No 245A, Noth Block, New Delhi-110001.
• Phone: 011-23095479
• Fax: 23093070.