Petpooja On Taxmen’s Radar, Pine Labs Acquires Shopflo & More

Petpooja & The Trail Of Missing Bills

India’s restaurant tech ecosystem is under scrutiny, as tax officials have uncovered evidence of eateries erasing bills to evade taxes. In the crosshairs of tax officials is PetPooja, a provider of SaaS-based POS solutions for restaurants, for allegedly enabling restaurants to manipulate their sales data. 

The Vanishing Act: What began as a probe into popular biryani chains in Hyderabad quickly snowballed into a nationwide crackdown. GST and income tax officials have so far raided nearly 100 restaurants across 45 cities, uncovering a pattern of concealed sales. In Punjab alone, officials estimate that over ₹5,000 Cr in sales was scrubbed from digital ledgers, with more cases expected as the probe widens. Unlike traditional cash hoarding, this was a heist where printed receipts were allegedly deleted from PetPooja’s system.

Modus Operandi: Officials believe the billing software enabled restaurants to delete or edit entries at scale without disrupting the sequential numbering of bills. By selectively removing cash transactions, restaurateurs allegedly concealed sales and evaded taxes.

Petpooja’s Defence: The company claims it is merely an infrastructure provider, not a tax compliance tool. The startup argues that the ability to edit entries is a standard industry feature necessary, adding that it maintains comprehensive audit logs that track every change. Tax officials have already confiscated 60 TB of data from the startup’s offices to trace deleted or altered records. The startup says it will extend full cooperation to authorities seeking information within the scope of due process.

With arrests already made and more expected, the case is evolving into a test of India’s SaaS ecosystem. As authorities sift through terabytes of data and historical tax filings, here’s how Petpooja finds itself on taxmen’s radar. 

From The Editor’s Desk

Pine Labs Acquires Shopflo

• The listed fintech major is acquiring the ecommerce-focused SaaS startup in an all-cash deal for ₹88 Cr. The acquisition is expected to be completed in the next three months.
• The deal will enable Pine Labs to increase its presence in the ecommerce and digital merchant payments space, while paving the way for building a full-stack payments platform. 
• Shopflo is Pine Labs’ first acquisition since listing last year, and comes four years after it acquired Setu in 2022. The fintech major’s profit soared 7X YoY to ₹42.4 Cr in Q3 FY26, while the top line rose 24% YoY to ₹744.3 Cr.

Weekly Funding Tanks

• Indian startups raised a mere $39 Mn across 15 deals last week, down 35% from $60 Mn in the preceding week. Gaming studio LightFury and Kabeer Biswas’ new venture M took home the biggest cheques at $11 Mn and $8.8 Mn, respectively.
• The media and entertainment segment emerged as the most funded startup sector last week, while the AI segment saw the highest number of deals materialise.
• Despite the subdued sentiment, seed-stage funding surged multifold to $17.8 Mn versus $3.3 Mn in the previous week. Meanwhile, Rainmatter and Finvolve emerged as the most active investors last week, backing two startups each.

Mixed Week For Startup Stocks

• Of the 56 new-age tech stocks under Inc42’s coverage, 22 gained in a range of 0.6% to close to 14% last week. The remaining 34 fell in a range of 0.22% to about 14%. 
• TAC Infosec and Ola Electric emerged as the biggest losers, while Aye Finance and IndiQube gained the most. The cumulative market cap of the 56 startup stocks declined to $131.25 Bn at the end of last week from $133.72 Bn a week ago
• The mixed week came largely on the back of an uneasy ceasefire in West Asia, subdued Q4 earnings and outlook of IT giants, and continued selling by FIIs. The subdued industrial outlook and RBI flagging early signs of a slowdown added to the selloff.

Reliance Doubles Down On Q-Comm

• Reliance Retail claims to have scaled its four-hour apparel delivery service, Ajio Rush, to 600+ cities at the end of March 2026. This represents a roughly 60X QoQ expansion from ten cities that the offering was operational in during the last quarter.
• The retail giant also said that JioMart clocked a 29% QoQ and 300% YoY growth in average daily orders for its hyperlocal delivery service. JioMart’s take on quick commerce is hyperlocal orders delivered under 30 minutes. 
• Overall, Reliance Retail’s net profit jumped a mere 0.5% YoY to ₹3,563 Cr in Q4 FY26, while revenue from operations rose 11.1% YoY to ₹87,344 Cr. 

ElasticRun’s D2C Playbook

• As quick commerce rewrites the rules of B2B ecommerce, ElasticRun is trying to stay ahead of the curve by repurposing its rural distribution network to anchor the quick fulfilment needs of D2C brands. 
• By converting its 900+ delivery stations into micro-fulfillment centers across 500 cities, the unicorn now handles close to 5 Mn orders per day. In the last six months alone, it claims to have onboarded over 70 D2C brands.
• However, quick commerce demands tighter service levels and a two-hour window leaves zero room for error. Then, there are rivals like Shadowfax, Delhivery and Zippee that are aggressively encroaching on the same turf.

Inc42 Markets

Inc42 Startup Spotlight

Can Terrastack Bring Order To India’s Land Records?

India’s land ownership system is heavily fragmented, opaque and often stuck in manual records. This makes verification slow, transactions risky and governance difficult. Terrastack is trying to solve this problem by turning land into structured geospatial intelligence that governments and businesses can use.

Digitising Rural Land: Founded in 2024, Terrastack is building a geospatial data platform for rural land intelligence and land transaction management. Its core idea is to map land accurately using satellite imagery, mapping tools and digital records, creating a more reliable view of ownership and boundaries.

A Three-Layer Platform: The startup’s model rests on three layers. First, geospatial mapping digitises land boundaries and ownership patterns. Second, data infrastructure tools help governments and enterprises analyse land information. Third, digital platforms simplify land transactions, verification and governance, reducing the friction that has long slowed land-related decision-making.

Built For Real World: Terrastack is targeting sectors such as agriculture, rural governance, infrastructure development and financial services. For banks and NBFCs, this could mean better underwriting for rural and semi-urban borrowers, where uncertainty around title and ownership often limits credit access. 

With the homegrown geospatial analytics market set to cross $3.6 Bn by 2031, can Terrastack turn one of India’s oldest problems into a modern data platform?

Infographic Of The Day

PhonePe continues to dominate the UPI market with 46%+ market share and over 1,000 Cr transactions in March, staying comfortably ahead of Google Pay and Paytm.  

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