As kirana stores face mounting pressure in urban India, they are continuing to expand in rural markets.

Bengaluru-based VilCart is scaling into that divide, building over one lakh kirana stores across 30,000 villages, with a strong base in southern India, even as 200,000 kirana stores have shut across India over the past year, according to data from the All India Consumer Products Distributors Federation (AICPDF) and retail analysis firms such as Redseer and Grant Thornton Bharat,

“The data shows that about 1.5% of the country’s estimated 13 million outlets, with closures concentrated in urban markets as quick commerce captures high-margin categories. “.“Private labels are central to how this business becomes profitable,” said Prasanna Kumar C (CPK), Founder and CEO of VilCart.

“The data shows that about 1.5% of the country’s estimated 13 million outlets have shut, with closures concentrated in urban markets as quick commerce captures high-margin categories,” said Prasanna Kumar C (CPK), Founder and CEO of VilCart.

“Private labels are central to how this business becomes profitable,” he added.

While VIlCart is targeting ₹1,500 crore in revenue by FY27, up from ₹1,173 crore in FY26, the company is also exploring a $25–30 million fundraise over the next two years, according to people familiar with the matter, to deepen its distribution network and expand into new geographies, including pilot clusters in Maharashtra such as Sangli, and select markets in Uttar Pradesh and Bihar.

Private labels move to the core

One of the unique trends for VIlcart is not owning any stores but routing its private labels into the rural areas which has expanded from 5% of revenue in April 2025 to 18% by April 2026, and are targeted to reach 25–30% by FY27, implying ₹375–450 crore in private label revenue on a ₹1,500 crore topline.

“Private labels are central to how this business becomes profitable,” said Prasanna Kumar stating that “Distribution gives us access, but owning the product is what drives margins.”

Supply chain, not shelf

VilCart’s play is logistics, not retail. It services over one lakh kirana stores across 30,000 villages every 24–48 hours, with a reported 99% fulfilment rate, driving repeat orders of 3.8–4.5 times a month at ₹4,500–₹5,000 per order.

Rather than selling to kiranas, the company uses them as aggregation and last-mile nodes, compressing delivery costs that have historically made rural commerce unviable at scale.

The company is also evaluating a shift to electric vehicles for last-mile delivery, with plans to gradually convert its fleet of around 300 diesel vehicles. While upfront costs remain high, EVs could become viable as utilisation improves and fuel cost savings accumulate.

Flipping the chain: rural to rural

The rural retailer sources directly from farmer producer organisations and rural manufacturers, cutting out three to four layers of intermediaries between producers and village retailers.This rural-to-rural model improves price realisation at the farm gate while keeping consumer pricing competitive,, creating margin headroom that conventional FMCG distribution rarely achieves, Prasanna explained .

Kirana as infrastructure

In VilCart’s model, the kirana store is more than a retailer, it is a local economic node, serving as a credit provider, delivery point and trust anchor for dozens of households.

The company is extending this role through a B2B2C marketplace, allowing kiranas to fulfil orders for appliances and farm equipment without holding inventory.

A B2C app launched in late 2025 connects rural households directly to these stores, increasing throughput without adding stock and effectively turning them into “Grameen supermarkets”.

Scaling through local clusters

Expansion follows a hub-and-spoke model, with rural distribution centres serving 30–40 km radii and run by local teams.

Rather than a pan-India rollout, VilCart is expanding market by market, onboarding stores, building local supply chains, and working with self-help groups and village entrepreneurs to operate warehouses and last-mile delivery.

Growth is driven by entering new villages rather than adding stores in existing ones, with the company deepening density within clusters before moving into adjacent regions.

Capital vs scale

At ₹1,120 crore in FY25 revenue, VilCart reported a negative EBITDA margin of about 6.8%, implying losses of over ₹65 crore. That has narrowed to around 4.5% in FY26, with private labels expected to drive a move toward breakeven.

Backed by Asia Impact, NABVENTURES and Spark Capital, VilCart has raised about $26 million so farr—a fraction of rival Jumbotail’s $120 million-plus—highlighting the gap in growth capital available to rural commerce players. The proposed fundraise is expected to support deeper penetration in existing markets and selective expansion into new states.

“The model is now working across markets, and the next phase is about scaling it faster,” Kumar said.VilCart’s ambition is to become the distribution infrastructure layer for rural India, rather than a conventional retailer. “This is not just about selling products, it is about building distribution where it does not exist,” Kumar said.

Published on April 30, 2026