When Bengaluru-based OkCredit decided to shut down its digital storefront for kiranas (mom-and-pop stores)—OkShop—in April 2022, it wasn’t the first to do so. The digital bookkeeping startup was simply following in the footsteps of close rival Khatabook, which also shut a similar offering called MyStore in November 2021. Bengaluru-based Dukaan pivoted altogether earlier this year, focussing on small, direct-to-consumer brands, enterprises, and content creators rather than kiranas.

Kiranatech—tech solutions built for kiranas—makes up a big chunk of India’s ‘dukaantech’ or shoptech industry. Not surprising, considering there are over 12 million kiranas sprinkled across every nook and corner of the country. But it’s a segment that’s staring down the barrel of what’s increasingly looking like an existential crisis.

Dukaantech, in its purest form, involves building tech for shops. Any shops. Whether it’s a kirana or, say, a mid-sized supermarket chain.

A senior executive in the dukaantech industry

Startups have been  chasing the kirana market chasing the kirana market The Ken Who has the key to the kirana store treasure chest? Read more for a while now, eyeing the treasure trove of data that originates from the ecosystem. Much of it goes uncaptured due to the chaotic and disorganised nature of the segment.

Bookkeeping was one way to help kirana owners keep track of their transactions and eventually bring them online. “It wasn’t even about problem-solving,” says a senior executive at a dukaantech startup. “It was about pitching this as a new way of business.” They and others in the industry The Ken spoke to requested anonymity as they didn’t want to be seen publicly commenting on the topic.

The bookkeeping segment grew popular quickly—four-year-old Khatabook claims claims Khatabook Celebrating 3 years Milestone with 1.8 Trillion+ INR Monthly Recorded Transactions Read more to have over 10 million monthly active users (MAU) as of January 2022, while six-year-old OkCredit reportedly reportedly The Hindu BusinessLine Credit given by merchants on OkCredit went up 23% this festival season Read more had 5.5 million as of November 2021. Money also poured in. Khatabook and OkCredit have raised $187 million and $85 million in total, according to data provider Tracxn.

However, neither company is profitable. In the year ended March 2021, Khatabook recorded recorded Inc42 Khatabook Spent INR 108 Cr To Earn INR 19.1 Cr In FY21 Read more a loss of Rs 32.5 crore ($4.2 million), while earning a revenue of Rs 19.1 crore ($2.4 million).