India’s restaurant technology sector is under scrutiny as tax officials investigate potential tax evasion enabled by digital billing systems. Petpooja, a SaaS-based POS solutions provider for restaurants, is currently under investigation for allegedly allowing restaurants to manipulate sales data.
The investigation began with popular biryani chains in Hyderabad and has expanded nationwide, with raids on nearly 100 restaurants across 45 cities. Authorities estimate that over ₹5,000 Cr in sales were concealed in Punjab alone, with further cases expected as the probe continues. Tax officials allege that Petpooja’s software enabled restaurants to delete or edit transactions, specifically cash transactions, without disrupting the sequential numbering of bills.
Petpooja claims it is merely an infrastructure provider and not responsible for tax compliance. The company asserts that the ability to edit entries is a standard industry feature and that it maintains comprehensive audit logs. Tax officials have confiscated 60 TB of data from Petpooja’s offices to trace deleted or altered records. The company stated it is cooperating fully with authorities.
In other news, Pine Labs has acquired Shopflo, an e-commerce-focused SaaS startup, in an all-cash deal for ₹88 Cr. The acquisition, expected to be completed within three months, will enable Pine Labs to enhance its presence in the e-commerce and digital merchant payments space, facilitating the development of a full-stack payments platform. This acquisition marks Pine Labs’ first since its listing last year and follows its acquisition of Setu in 2022. Pine Labs reported a 7X YoY increase in profit, reaching ₹42.4 Cr in Q3 FY26, with a 24% YoY rise in revenue to ₹744.3 Cr.
Additionally, Indian startups raised $39 Mn across 15 deals last week, a 35% decrease from the previous week’s $60 Mn. Gaming studio LightFury and Kabeer Biswas’ new venture M secured the largest investments at $11 Mn and $8.8 Mn, respectively. The media and entertainment sector was the most funded, while the AI sector saw the highest number of deals. Seed-stage funding increased to $17.8 Mn, and Rainmatter and Finvolve were the most active investors, each backing two startups.
New-age tech stocks experienced a mixed week, with 22 of 56 stocks gaining and 34 declining. TAC Infosec and Ola Electric saw the biggest losses, while Aye Finance and IndiQube gained the most. The cumulative market cap of the 56 startup stocks decreased to $131.25 Bn. The market performance was influenced by factors such as the situation in West Asia, Q4 earnings reports, and selling by Foreign Institutional Investors (FIIs).
Reliance Retail has expanded its four-hour apparel delivery service, Ajio Rush, to over 600 cities as of March 2026, a significant increase from ten cities in the previous quarter. JioMart also reported a 29% QoQ and 300% YoY growth in average daily orders for its hyperlocal delivery service, which promises deliveries in under 30 minutes. Reliance Retail’s net profit increased by 0.5% YoY to ₹3,563 Cr in Q4 FY26, with revenue from operations rising 11.1% YoY to ₹87,344 Cr.
ElasticRun is adapting to the quick commerce trend by repurposing its rural distribution network to support the fulfillment needs of D2C brands. By converting its delivery stations into micro-fulfillment centers, the company now handles approximately 5 Mn orders per day and has onboarded over 70 D2C brands in the last six months. The company faces competition from firms like Shadowfax, Delhivery, and Zippee.
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