Rise of Value Fashion, Google's AI Push, and Kuku FM Eyes IPO

India’s value-fashion race has become one of the biggest battles in modern retail - not because it’s glamorous, but because it prints money at a scale most internet startups can only fantasize about. And at the center of it sits Zudio, Tata’s ₹7,000-crore profit machine, whose rise has reshaped everything from high-street rentals to landlord negotiations to apparel pricing psychology in Tier 2 and 3 India. The frenzy is so intense that Yousta, Reliance’s answer to Zudio, is now racing to catch up, store by store, AOV by AOV, hoping to engineer the same magic.

Let’s start with Zudio’s dominance. The brand will close FY25 at around ₹7,000 crore revenue, nearly double from two years ago. Its average store does ₹14-18 crore annually, with some crossing ₹20 crore in dense catchments, numbers unheard of in value fashion. The SPSF (sales per square foot) sits at ₹14,000-₹18,000, nearly 2x Pantaloons and 3x Shoppers Stop. The format is ruthlessly optimised: 7,000-9,000 sq. ft stores, 500-600 SKUs, 12-15 inventory turns a year, and an AOV of ₹440-₹520. In a business where margins depend on volume velocity rather than basket size, this is a retail supercomputer.

Store payback? 12-18 months. That is why mall developers offer Zudio anchor-like leases, and why landlords admit that a Zudio outlet stabilises footfall better than half the premium brands combined.

Reliance saw this and reacted the way only Reliance can - by creating Yousta and plugging it into the giant Jio Retail machine. The store count is still small (~100 stores), but the ambition is unmistakable. Yousta’s AOV sits slightly lower at ₹350-₹420, and while its SPSF is improving, it is still 20-30% below Zudio’s. But Reliance knows the real game: scale kills competition in value fashion. If Yousta reaches 500 stores faster than Zudio can reach 1,000, this becomes a two-player market.

What’s driving this gold rush? Simple: India is undergoing a value-fashion supercycle. Over 300 million Indians now shop for apparel frequently but are not willing to pay ₹800-₹1,200 for a T-shirt at H&M or ₹1,500 at Levi’s. The sweet spot is ₹249-₹499, which Zudio owns with brutal efficiency. E-commerce brands like Bewakoof or FastFashion labels on Myntra cannot match offline conversion, offline AOV uplift, or in-store trial economics. Even Flipkart Fashion and Ajio struggle in categories where touch-and-feel matters.

What most people underestimate is how operationally unforgiving this model is. Value fashion only works if you can run tight supply chains with 50-60% gross margins, push volumes fast enough to minimise discounts, and avoid inventory write-offs. Zudio cracked this using Tata’s backend muscle - Trent’s sourcing, Westside’s vendor network, and decades of retail optimisation.

The more interesting question: Can any third player succeed?

DMart tried fashion capsules and discovered margins evaporate without fast design cycles. Global brands don’t have low-cost supply chains. E-commerce brands don’t have offline discipline. Regional chains lack procurement muscle. Even Myntra’s private labels (Roadster, HRX) cannot compete in the sub-₹499 price war without compromising quality.

For the next decade, premium brands will fight for the top 10% of consumers. The bottom 70-80% will be owned by Zudio and Yousta. The middle, ₹700-₹1,200 price bands, will collapse. Value fashion will flatten India’s apparel pyramid.

This is Walmart vs Target, recreated in India at double the speed and 1/10th the price point.

And the irony? Despite the hype around D2C and e-commerce unicorns, the real money in Indian consumer retail is still being made by physical stores, simple price points, ruthless cost engineering, and mass repeat purchase behavior.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Ye Mera India”: Google’s India AI Push To Provide $8 Mn To CoEs, Offer Grants To Startups

Google is sharpening its India AI push with an $8 Mn commitment to support four government-backed AI Centres of Excellence, alongside funding for startups and healthcare-led AI use cases.

While separately allocating $2 Mn to set up an Indic Language Technologies Research Hub at IIT Bombay. It is also extending $50K grants each to voice AI startups Gnani.AI and CoRover.AI, signalling a focus on foundational language and speech models built in and for India

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“Aaj Mai Upar, Aasman Neeche”: Kuku FM Ropes In Investment Bankers For $200 Mn IPO

Kuku FM is lining up a potential $200 Mn IPO after appointing Kotak Mahindra Capital, Axis Bank, and Morgan Stanley as its investment bankers, with plans to use the proceeds to expand its content library.

And deepen its regional-language offerings, a move that comes just months after the audio startup raised its largest cheque yet of $85 Mn in a Series C round led by Granite Asia.

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“Humari Bhi Haan Hai”: Peak XV-Backed Turtlemint Gets SEBI Nod For IPO

Peak XV-backed insurtech startup Turtlemint has received SEBI’s approval to go public, clearing a key regulatory hurdle for its much-anticipated IPO.

The company had pre-filed its DRHP via the confidential route in May 2025 and is now gearing up to raise up to ₹2,000 crore from the market. With the nod in place, Turtlemint’s long walk from digital insurance distributor to listed entity is officially entering its final stretch.

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“Tomorrow Never Knows”: Wingify Buys Blitzllama To Give An AI Boost To VWO Platform

Wingify has acquired Y Combinator-backed AI startup Blitzllama to strengthen the user research layer of its VWO platform, with the deal size undisclosed.

The acquisition brings continuous AI-led feedback into VWO’s experimentation tools, used by over 3,000 companies across 90+ countries. The move follows Everstone Capital’s $200 Mn majority stake buy in the once-bootstrapped SaaS firm earlier this year.

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“Hum Saath Saath Hai”: Freshworks To Acquire Incident Management Platform FireHydrant

Freshworks is set to acquire AI-powered incident management platform FireHydrant, aiming to deepen its IT operations and service management stack.

The deal, expected to close in Q1 FY26, will merge Freshservice with FireHydrant’s incident and IT operations capabilities into a unified, AI-native ServiceOps platform. In plain terms, Freshworks wants enterprises to spot trouble sooner and respond faster.

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1. Spacetech startup Digantara has raised $50 Mn, about ₹454.4 Cr, in a Series B round to scale its space surveillance capabilities and fuel global expansion. The round saw participation from SBI Investments Co Japan, 360 One Asset, Ronnie Screwvala, along with existing backers Peak XV Partners and Kalaari Capital.

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2. Zaggle has raised ₹15 Cr from Times Group parent BCCL and promoter entity RAN Ventures through the issuance of 10.58 lakh warrants, alongside signing an advertising agreement with BCCL. The fintech firm has also set up a wholly owned subsidiary, Zaggle Payments IFSC Ltd, in GIFT City.

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3. Kusha Kapila’s D2C innerwear brand Underneat has raised $6 Mn in a pre-Series A round led by existing investor Fireside Ventures. The startup plans to use the capital to scale operations and deepen its distribution footprint, following its earlier $1 Mn seed round backed by Fireside.

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4. Climatetech startup Aurassure has raised ₹25 Cr in a pre-Series A round led by Rainmatter, Unicorn India Ventures, and Maithan Alloys Limited. The company plans to use the capital to expand across the Global South, including Latin America, Africa, and South Asia.

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5. D2C haircare brand Moxie Beauty has raised $15 Mn in a funding round led by Bessemer Venture Partners, with participation from Mokobara cofounders Navin Parwal and Sangeet Agarwal, and Reckitt’s Arjun Purkayastha. The startup will deploy the capital toward product R&D and talent hiring.

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