These Two 19-Year-Olds Scaled Zepto Company Into A $900 Million In Nine Months
Zepto, a fast commerce business created by two 19-year-old Stanford dropouts nine months ago, is now worth $900 million. On Monday night, the firm revealed that it had raised $200 million.
Y Combinator Continuity Fund and Kaiser Permanente lead the funding round. Nexus Venture Partners, Glade Brook Capital, and Lachy Groom were among the significant existing investors in Zepto’s newest Series D investment.
The company has raised approximately $350 million and was valued at $560 million in April-December 2021.
Aadit Palicha, chief executive officer (CEO) and co-founder of Zepto company, stated that the company’s revenue has increased by 800 per cent every quarter. Second, the company’s cash burn has decreased by a fifth on a pre-order basis. He also mentioned that the company claims to have an 88-point Net Promoter Score (NPS), which is a number that corporations use to assess client loyalty.
“This incredible performance over the last few months has proven to investors that Zepto will be one of the winners in the Indian Q-Commerce industry,” he stated emphatically.
The company is also testing several services that will bring coffee, tea, and other products from local cafes in under 10 minutes throughout a number of Mumbai neighbourhoods. If the experiment goes well, the company aims to expand this service across India, which is not a food delivery sector.
Aadit Palicha and Kaivalya Vohra founded Zepto in April 2021, and it now delivers 3,500 products in 11 cities in under 10 minutes. Delhi, Mumbai, Bengaluru, Ghaziabad, and other towns offer these services. Shortly, Zepto wants to expand into another dozen cities.
“We don’t just want to expand across the country; we also want to double down on the team we’ve developed because building a $900 million company in nine months is ridiculous.” Palicha told Business Insider, “Frankly, the team has got everything to do with that.”
He stated that the company has hired 1000 workers across all functions in the last few months and aims to hire another 1000 in the coming year. Engineering, analytics, operations, marketing, finance, and human resources were all targeted in the first wave of hiring (HR). The second phase would be devoted to technology and product development.
Since the second half of 2021, competition in the rapid commerce market has expanded dramatically. Dunzo, Swiggy Instamart, Zomato-backed Blinkit (Grofers), and now Tata-backed BigBazaar compete with Zepto.
About Zepto Company
The digital demand for smart applications is growing at an unprecedented rate. We all buy groceries to meet our daily eating requirements. All of your grocery orders will be delivered to your comfortable couch using an app on your Android phone, eliminating the need to go to the market for your daily needs. You can get your groceries with just a few touches on your mobile device.
In the grocery delivery market, companies aim to shorten the time it takes to deliver groceries. Weezy, Gorillas, Jokr, Swiggy Instamart, Grofers, and Zepto are just a few of the global enterprises fighting with the primary goal of reducing delivery time and transporting products in 10-15 minutes.
Zepto isn’t just another grocery delivery app; it’s a platform that promises 10-minute supermarket deliveries and is created to revolutionise food sales and delivery. Customers may easily order from 2500+ products and have them delivered to their doorstep using Zepto’s 10-minute e-grocery delivery app with Zepto by their side.
Zepto’s Background
Zepto, a Mumbai-based company, provides a 10-minute grocery delivery service. Zepto, a startup founded by Aadit Palicha and Kaivalya Vohra, is recognised for delivering groceries in 10 minutes.
In 2021, it collaborated with 86 dark store owners in thirteen different places, resulting in more than one million deliveries. Zepto company uses its network of ‘cloud shops’ or micro-warehouses to fulfil orders quickly.
Zepto’s secret is its ability to regularly generate 2,500+ items for delivery in under 10 minutes. It’s at the centre of everything the firm does, and it’s why they’ve been able to grow so swiftly while retaining such high levels of client loyalty.
Thanks to the dark store concept, the Parel-based speedy grocery delivery service has reduced the time it takes to deliver groceries to only ten minutes. The grocery delivery industry is seeking to capitalise on quick commerce as the next big thing. Fast-delivery startups like Zepto in India and Fridge No More in New York City are among the fastest-growing in the industry.
Zepto – Industry
In India, a $1 trillion retail industry where grocery purchases account for the vast bulk of consumer expenditure, e-grocery delivery is gaining steam. The Indian e-grocery market was valued at $2.9 billion in 2020, and from 2021 to 2028, it is predicted to grow at a 37.1 per cent annual pace.
As a result of changing customer preferences, increased urbanisation, and a tech-savvy youth that loves to make online purchases, the sector has grown in popularity in recent months.
According to RedSeer research, the fast commerce industry will be worth $30 million in 2021. In 2025, the same segment is expected to grow 15 times to a $5 billion market.
Consumers flock to customisable and convenient internet platforms for grocery shopping instead of walking down to the local shops as their standard of living rises and their daily schedules tighten.
The popularity of online grocery delivery grew after the COVID-19 outbreak. Consumers are shifting to online food shopping due to social distancing limits, which are not only easier but also safer.
Zepto – Founders and Team
Aadit Palicha and Kaivalya Vohra, both 19 years old, founded Zepto after dropping out of Stanford University’s prestigious computer science department to return to India and start a company. The company was created in September of last year and officially launched in April of this year.
Aadit Palicha
KiranaKart and Zepto’s CEO and Co-Founder are Aadit Palicha. Palicha earned a Bachelor’s degree in Computer Science from Stanford University after receiving an IB diploma in Mathematics and Computer Science from GEMS Education. Aadit then finished Y Combinator Grade: W21 and began working as a Project Lead at PryvaSee. When Aadit Palicha was 17, he established his first company, GoPool. In April 2020, he left the company to create KiranaKart and eventually Zepto.
Kaivalya Vohra
Kaivalya Vohra is the Co-Founder and Chief Technology Officer of both KiranaKart and Zepto. He is a Stanford University Computer Science graduate who, like Aadit, participated in Y Combinator.
The number of employees at Zepto varies between 51 and 200.
Zepto – Startup Story
Palicha and Vohra had both studied at Stanford to pursue a Computer Science degree but had dropped out to pursue their entrepreneurial dreams.
The inspiration for Zepto arose from the confines of their homes during the Covid-19 epidemic. Due to a boom in demand for delivery services, groceries and other necessities would arrive in a matter of days, leaving a gap in the market for speedy delivery. As a result, Zepto was born with all of this knowledge.
After multiple collaborations on various initiatives, including a ride-hailing commuting app for youngsters, these teenagers were abruptly arrested in their Mumbai homes due to Covid restrictions. Even while food delivery, which was deemed crucial by local authorities, was still allowed across much of the country as the virus spread, the couple struggled to collect their supplies as the disease progressed.
While Zepto company has gotten a lot of press, Palicha and Vohra’s first effort, KiranaKart, hasn’t gotten nearly as much. KiranaKart, on the other hand, has inspired Zepto. KiranaKart was a supermarket delivery service, as its name suggests. It had made deals with Kirana merchants to deliver groceries in less than 45 minutes. Global Founders Capital, Contrary Capital, and angel investors led a $730,000 pre-seed investment. Vohra and Palicha planned to supply the first 1.5 lakh units for Rs 1 each at the time.
Zepto – Mission and Vision
The founders found it difficult to procure food as two bachelors living alone, so they concentrated their applications on grocery delivery. Unlike their initial firm, KiranaKart, which aimed to make grocery delivery easier for kiranas, Zepto intends to reduce delivery times.
Name, logo, and tagline for Zepto
The company, which utilises the term “Zepto” to represent “a factor of 1021, i.e. 0.000000000000000000001,” is called after a minuscule unit of time, and it provides a 10-minute grocery delivery service, outperforming several well-funded competitors.
Zepto’s tagline is, “Groceries delivered in 10 minutes.”
Zepto – Business Model and Revenue Model
On up to 90% of orders, Zepto company delivers groceries in ten minutes via a system of dark storefronts and mini-warehouses. Zepto operates in the Indian fast commerce market. It is developed around the rapid service approach and is customer-centric.
Aadit claims that their average delivery time is 8 minutes and 47 seconds to assure a faultless delivery experience. The Mumbai-based company uses a hotspot strategy to cater primarily to digital purchases through a network of dark stores or retail distribution centres.
A dark store is a small neighbourhood store that customers can’t visit but can order from online for packaged delivery. Dark stores are not new to the Indian market; Aadit says the concept has not yet been fully explored. Zepto’s connectivity is aided by population, traffic dynamics, geography, road patterns, weather conditions, last-mile operational improvement, real estate pricing, and other geographic data and local intelligence. The company’s dark warehouses and cool rooms are designed to meet specific criteria like ease of transit, allowing packers to fill orders as quickly as possible.
Topography, population, traffic dynamics, weather, last-mile supply availability, real estate values, and other geographic data are supposed to aid Zepto in optimising its network.
Zepto – Funding and Investors
To date, Zepto has raised $360 million in four fundraising rounds. Zepto’s most recent investment round (Series D) was on May 2, 2022, and it helped the firm raise $200 million. Contrary led Zepto seed fundraising in September 2020.
Zepto – Growth
Zepto will expand into Bengaluru, Mumbai, and Delhi-NCR in the following months, with Hyderabad, Chennai, Pune, and Kolkata to follow. It has a technical office in Bengaluru and operations in Mumbai. Zepto company has hired senior executives from Dream11, Flipkart, Pharmeasy, Uber, and Pepperfry.
Zepto also has engineering, operations, marketing, and financial opportunities available. Palicha boasts a 200 per cent month-over-month growth rate and a 78 per cent monthly retention rate.
He said, “We’re looking at a fairly ridiculous run rate.” “In the last six months, we’ve increased our revenue by tenfold.” “Now we’re working to double our size by February or March,” Palicha added.
Zepto had a valuation of $570 million when it was a five-month-old firm after obtaining $100 million in a Series C round led by Y Combinator’s Continuity Fund, which was a twice increase from its last valuation $60 million only 45 days before. Zepto has raised another round of funding spearheaded by Y Combinator, bringing its total valuation to $900 million.
Another encouraging development for Zepto has been the knowledge it has gained in recent months. Senior executives from Uber, Flipkart, Amazon, and Pharmeasy have joined the company.
One of the reasons why some entrepreneurs have selected Zepto, according to Palicha, is that it has allowed people who had relocated from Mumbai to Bangalore to return to their homes. Nonetheless, he claims that the startup’s rapid growth, meticulous execution, and ambitious goals have captured others with similar interests. He stated, “We’ve been able to walk the walk.”
“They began with a different model, quickly switched to fast commerce in August 2021, and are currently acquiring 100,000 new consumers each week, 60 per cent of whom are women.Their meticulous attention to detail in the logistical experience has allowed them to scale to most major metros in just five months. We believe Zepto will win in this space in the long run,” Palicha added.
Zepto – Challenges
In one of the most recent allegations of founder and investor misconduct in the fast commerce delivery business Zepto. Ansh Nanda, co-founder of the startup, claimed that the other co-founders and Nexus Ventures pushed him to abandon his holdings in the company. This was taken up by Nanda, who filed a police report against Zepto’s co-founders and Nexus Ventures partner Suvir Sujan. On the other hand, the co-founders reacted quickly by filing a complaint with the Delhi High Court. Nexus has financed a third business, Zepto, in which one of the co-founders has been mentioned in an FIR. YoloBus and Acko were two other firms that have previously dealt with similar issues.
Zepto – Competitors
Many businesses compete with Zepto and have already been driving fast-paced delivery of groceries like:
Many companies compete with Zepto and have already pioneered fast-paced grocery delivery, including:
• Swiggy Instamart
• Big Basket
• Blinkit
Swiggy and Big Basket have already started delivering goods in 10-15 minutes, while Blinkit is preparing to launch 10-minute food deliveries in 10 cities, competing with Zepto. Dunzo is a competitor to Zepto since it uses its Xpress Mart dark store network to deliver groceries in Bengaluru in 19 minutes.
Zepto – Future Plans
The Mumbai-based company will use the funds to expand its dark shop network, expand its client base, and hire more employees. Bengaluru and the Delhi-National Capital Region have already received it, with Hyderabad, Chennai, Pune, and Kolkata to follow in the next 30 days.
It expects to have 100 dark enterprises open by the end of the year, serving about 100 pin codes. According to a study firm, quick commerce will reach $300 million by the end of this year and grow to $5 billion by 2025.
Palicha, the co-founder, emphasised that no one in India has wholly understood marketing. He said that if you look at a few older organisations seeking to execute this strategy, you’ll discover that many of them are unfocused and lack the consistency to follow a single model. They become involved in various activities, which is the most severe problem in any significant corporation.
“Our median delivery times have stabilised, if not decreased,” he explained, “primarily because as we increase our coverage and extension, it becomes a factor of particular cloud stores and how they function.”
Express delivery is not a new concept; most existing e-grocers have experimented with it in the past, with variable results. Following the Covid-19 pandemic’s increased adoption of online groceries, these platforms have reintroduced fast delivery to customers, especially under the dark-store concept.
Zepto, an Indian grocery delivery startup that takes 10 minutes, has raised $100 million.
Zepto, a Mumbai-based startup that delivers 10-minute rapid grocery delivery, has doubled its valuation to $570 million as it expands into new cities.
The $100 million Series C round in Zepto was led by Y Combinator’s Continuity Fund, according to the two companies. The round also included Glade Brook, Nexus, Breyer Capital, Lachy Groom, Global Founders Capital, and Contrary Capital, bringing the total amount raised to $160 million.
In November, the firm, which two 19-year-old Stanford graduates launched, emerged from stealth status. However, long before it began talking about the business, Zepto had grabbed the interest of the local startup community, with people voicing their opinions on the company.
Zepto, a play on a mathematical word, provides a 10-minute grocery delivery service. This category has exploded in popularity in recent quarters in numerous areas of the world. Swiggy and BlinkIt, two well-supported players, have also entered the rapid grocery delivery sector.
Zepto’s appearance in the scene was also entirely coincidental. Aadit Palicha and Kaivalya Vohra were on vacation in India when the pandemic struck.
The students, who had previously worked together on a number of initiatives, including a school-based ride-hailing service, were abruptly confined to their Mumbai homes. Even though grocery delivery, which was deemed important by local authorities, was still permitted across much of the country as the virus spread, the two struggled to get their supplies.
“We assumed that the internet play of the Indian grocery delivery space, one of the world’s largest,” Palicha said during a recent interview.
While the company is delighted by user enthusiasm and support, Palicha said in an interview last week that the company does not want to “get comfortable.”
“Individuals are happy when their deliveries arrive in ten minutes or less,” he continued, “but can we continue to scale SKUs and improve our unit economics?” (At the same time, he emphasised how important it is for Zepto’s employees and delivery partners to be happy, citing retention and internal feedback as examples.)
According to Sanford C. Bernstein, India’s e-grocery sector will be worth $25 billion by 2025. “By 2025, online grocery penetration will increase to 3-5 per cent, up from less than 1% presently.” Long-term structural reasons include rising wealth and prosperity, lower-tier consumption, e-commerce penetration, and a young population. “Grocery spending as a percentage of income remains high, at 30 per cent,” the firm’s analysts stated.
Zepto is currently present in Bangalore, Delhi, Gurgaon, Chennai, and Hyderabad, with ambitions to quickly grow to Pune and Kolkata. It has put up a maze of over a hundred dark storefronts across these cities to ensure speedy deliveries, which it claims are designed for speed.
He stated, “We’re looking at a ridiculous run rate.” “In the last six months, we’ve increased our revenue by tenfold.” “Now we’re working to double our size by February or March,” Palicha added.
Another positive development for Zepto in recent months has been the talent it has attracted. Executives from Flipkart, Amazon, Uber, and Pharmeasy have all visited the firm.
According to Palicha, the reason so many executives have joined Zepto is that it allows individuals who have relocated from Mumbai to Bangalore to return to their hometowns. He believes, however, that the startup’s rapid development, disciplined execution, and ambitions have attracted people who share his tastes. He stated, “In Zepto, we’re pumped to go all-in and win this round”. “Since they went through Y Combinator, we’ve seen that Aadit and Kaivalya are outstanding founders who bring relentless concentration and “Doordash-like” execution to the quick commerce model,” said Anu Hariharan a partner at Y Combinator.
“They started with a previous strategy, transitioned to fast commerce in August 2021, and are now acquiring 100,000 new customers each week, 60% of whom are women.” In just five months, they were able to scale to most major metros due to their thorough attention to detail in the logistics experience. We feel Zepto will come out on top in the long run.”
Zepto raises $200 million at a $900 million valuation
Zepto, a 10-minute delivery service business, raised $200 million in Series D funding, valuing it $900 million.
According to an official announcement, “Y Combinator Continuity doubled down and led Zepto’s Series D with new investor Kaiser Permanente joining in to back the company.”
According to the release, Nexus Venture Partners, Glade Brook Capital, and Lachy Groom are among the existing investors who have upped their stakes.
“We increased sales by 800 per cent quarter over quarter while cutting burn by 5X every order,” says Aadit Palicha, Co-Founder & CEO of Zepto. “While doing so, our team continued to amaze our customers. At scale, we maintained an 88-point NPS and 60 per cent Month-1 Buyer Retention. Because of its excellent execution over the last several months, investors can see that Zepto will be one of the winners in Indian Q-Commerce.”
The company now employs over 1,000 individuals across all functions, including engineering, analytics, operations, marketing, finance, and human resources.
“Our strict focus on unit economics is the key reason for our incredible growth as a company,” says Kaivalya Vohra, Zepto’s Co-Founder and CTO. “We’ve made micro-markets viable and drastically reduced burn while scaling to hundreds of thousands of orders per day.”
Zepto is currently available in the top ten markets of Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Gurgaon, Pune, Noida, Kolkata, and Ghaziabad, with over 80% coverage. “Each of our locations has a radius of 2-3 kilometres. According to a spokeswoman, the objective is to extend further across India’s major cities “According to a spokeswoman.
Launches Zepto Cafe
Zepto is also testing a 10-minute delivery service for coffee, tea, and other café goods in select Mumbai neighbourhoods. The new Zepto Café category “has been favourably appreciated by early clients. If the experiment goes well, Zepto hopes to scale this service across India soon,” according to the company.
Zepto has secured $360 million from prominent Silicon Valley and Indian investors in just nine months. Palicha and Vohra left Stanford to create Zepto, a company that routinely produces 3,000+ products in 10 minutes.
edited and proofread by nikita sharma
