Smaller towns are not generally on theretail network’s immediate agenda because of the small base of customers. But that, small clusters of markets have an appetite for branded consumer goods that are unavilable there, according to Anil, Co-Founder of SuperK.

Realising this need, Anil Thontepu and Neeraj Menta, friends from BITS Pilani days, set up SuperK, a network of kirana stores. After testing the network in about 60 stores in Andhra Pradesh, the startup plans to open 200 stores by the end of the financial year 2022-23.

In order to reduce overheads, the startup has decided to run the network in an asset-light model where the franchise owners run the stores.

“Because we are targeting small towns, we are keeping the store size well under 1,000 sq ft. Each store costs about Rs 12-14 lakh (which will be borne by the store owners),” Neeraj said.

Addressing a press conference here on Wednesday, he said that the existing kirana models lack economies of scale and technical expertise, making it difficult for them to deliver a good customer experience. We give them the advantage as we engage with companies for large-scale sourcing.

To encourage the store owners in the initial days, the firm offers a ‘minimum earnings guarantee’ scheme for the first six months. Exiting is made less painful as the firm offers to buy back part of the infrastructure and stock.

“We are targeting to open over 1,300 stores in Andhra Pradesh, Telangana and Karnataka by the end of 2024,” Anil said.

Besides the initial funding by the promoters and friends, the company raised about ₹3.5 crore from a Japanese investor and ₹35 crore in Pre-Series A round, which Flipkart founder Binny Bansal led.