Zepto, the fast-growing quick commerce company, is poised for a significant leap with a fresh $350 million funding round led by prominent domestic investors. The company is now steering towards becoming fully Indian-owned by FY26 and is aiming for profitability by the next financial year. In addition, Aadit Palicha, the CEO and co-founder, has alluded to a possible IPO by 2025.
In an interview with PTI, Palicha responded to criticisms that quick commerce disrupts traditional kirana stores, dismissing these claims as “data-free narratives” that fail to recognize the sector’s contribution to job creation and economic growth. “Our 10-minute delivery model has created over 4.5 lakh jobs, offering wages far above the informal sector average,” he explained, emphasizing that Zepto utilizes Indian technology to deliver unmatched grocery services.
Addressing concerns about predatory pricing, Palicha pointed out that 99.8% of Zepto’s products are sold above cost. “Anyone who has any doubts about this is invited to write a book review. The numbers are self-evident,” he said.
Refuting the idea that quick commerce poses a threat to kirana stores, Palicha referenced data showing growth across all retail formats. He argued, “India is expected to experience $200 billion in incremental consumption. It’s unrealistic to expect kirana stores to shrink in this environment.”
On food quality and safety, Palicha acknowledged industry challenges but assured that Zepto works closely with regulatory bodies like FSSAI to ensure high standards. “We view them as partners in providing the best service to our customers,” he added.
The goal of Zepto’s most recent investment round, which was spearheaded by Motilal Oswal’s Private Wealth business, is to boost domestic ownership in advance of its intended initial public offering.
As part of its efforts to strengthen its presence in India, Zepto is expediting its move from Singapore and aims to achieve full Indian ownership by FY26.
The company is also expanding rapidly, with plans to grow its footprint from 24 cities to over 50 in the next quarter. Zepto is targeting top-line revenues exceeding $1 billion by April-May 2024, and has slashed its store profitability timeline from 23 months to just 8 months. “By the next financial year, we will be PAT positive, sending a strong signal to the market,” Palicha said.
Zepto’s coffee venture, Zepto Cafe, has been a resounding success, and Palicha predicts it could become a Rs 1,000 crore business. The initiative has helped boost customer engagement and retention for Zepto’s core business.
While acknowledging competition from rivals like Blinkit and Swiggy Instamart, Palicha emphasized that the market is large enough for multiple players. “We focus on execution, not competition. The opportunity in this space is enormous,” he stated.
With impressive growth and a clear path to profitability, Zepto is positioning itself as a major player in India’s burgeoning quick commerce sector.