Zepto postponed its initial public offering plans by a year. This puts the fast commerce giant in line with companies like Zetwerk, OYO, and PayU India, who similarly use a wait-and-watch tactic before parking on D-Street.
Zepto, notably, raised the size of the public offering from $450 million to $800 million to $1 billion. Zepto is reportedly trying to lower its capital burn and enhance its profit profile before going public, even though unfavourable markets are partially to blame.
Aadit Palicha, the CEO and cofounder of Zepto, has, however, made it clear that the company would submit its DRHP to SEBI later this year, suggesting a listing in 2026. Zepto has good reason to be concerned.
Despite operating sales of INR 4,454.52 Cr, up 2X YoY, the company recorded a loss of INR 1,248.64 Cr in FY24. The company has had to invest extensively in constructing additional warehouses, expanding into new areas, and providing discounts to attract and keep clients as a result of the escalating rapid commerce battles, which have eaten into this solid top line.
Not the Right Time to go Public
Given that Zepto has recently been involved in a number of issues, the timing also appears to be a little off. The company’s reputation has also been damaged by a number of things, such as the cancellation of the food business licence for its Dharavi warehouse in Mumbai due to significant food safety violations.
Apart from that, the closure of 44 Zepto Cafe warehouses because of supply chain issues, an increase in complaints, a possible antitrust case, the use of dark patterns, and the auto-activation of ad campaigns for dormant brands without the seller’s permission.
Like many others, Zepto is postponing its D-Street drive in light of the current situation.
Building its IPO Syndicate
Zepto is in the advanced stages of finishing its IPO syndicate and selecting more bankers, even though its IPO timeline is a few months off. According to a news report, JM Financial and Motilal Oswal have joined the IPO syndicate.
According to a well-known media organisation, these two are the other names in addition to Goldman Sachs, Morgan Stanley, and Axis Capital. The business had previously planned to raise $400–500 million for its IPO, but now it hopes to raise about $800 million.
Another probable reason Zepto is delaying its IPO is because it is feeling more at ease with its domestic shareholding pattern.
According to reports, domestic shareholders currently possess 43–44 per percent of Zepto, and the company is optimistic that it will have a majority Indian ownership by the time of its IPO or soon before.
Zepto is probably going to look into raising a sizable sum of money from foreign investors on the private market in the interim.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations.
The digital demand for smart applications is exploding like it was never before. To satisfy our daily food needs, we all buy groceries. You only need an app on your Android phone to have all of your grocery orders delivered to your comfortable couch, eliminating the need to go to the store for your daily requirements. With only a few taps on your mobile device, you can get your groceries now.
Companies are working to reduce the time it takes to deliver groceries in the grocery delivery business. Gorillas, JOKR, Swiggy Instamart, and Blinkit, are some of the companies from all over the world that are competing with the primary goal of reducing delivery time and transporting supplies in 10-15 minutes, and so is Zepto.
Zepto app is not another grocery delivery app but a platform that promises 10-minute deliveries of groceries, built to revolutionize the selling and deliveries of groceries. With Zepto by their side, customers can conveniently purchase 25000+ products and get them delivered to their doorstep with the help of Zepto’s 10-minute e-grocery delivery app.
Learn all about Zepto company, India’s first unicorn startup in 2023, its founders, history, funding and investors, business and revenue model, startup story, growth, revenue, challenges, and more.
Zepto is a startup based in Mumbai that offers a 10-minute grocery delivery service. The owners of Zepto, Aadit Palicha, and Kaivalya Vohra launched Zepto to provide customers with ultra-fast grocery delivery.
Specializing in delivering groceries before the turn of a year is what Zepto is hailed for. It has worked with 86+ dark store owners in 13 different areas in 2021, generating over one million deliveries. To fulfill orders promptly, Zepto employs its network of ‘cloud shops’ or micro-warehouses.
Zepto’s secret of the trade lies in its capacity to routinely offer an extensive range of goods for delivery in under ten minutes. It’s at the heart of everything the company does, and it’s why they’ve been able to grow so quickly while maintaining incredible client loyalty.
Zepto operates in multiple cities with a 1000+ strong workforce and delivers 25000+ products, including fresh produce, daily essentials, health products, and more, within 10 minutes. Utilizing advanced technology and optimized delivery centers, the company is transforming the Indian grocery segment. With rapid commerce on the rise, Zepto’s innovative approach positions it as a leader in the grocery delivery sector, capitalizing on the growing demand for faster delivery services in India.
Zepto launched Zepto Atom, a paid analytics tool to help brands understand customer behaviour in real time in May 2025. Co-founder Aadit Palicha announced it on LinkedIn, calling it a big step for how brands grow on the platform.
Zepto Atom builds on the free Brand Portal, adding advanced features like:
Live PIN-code level maps to track performance area by area
Real-time data on sales, views, and conversions, updated every minute
With these tools, brands can improve pricing, ads, and stock where needed, helping them grow faster.
Zepto – Industry
As per IMARC Group’s analysis, the Indian online grocery market attained a value of $6.8 billion in 2022. Looking ahead, the market is anticipated to experience substantial growth and is projected to reach $37.0 billion by 2028. This growth trajectory indicates a remarkable compound annual growth rate (CAGR) of 31.3% during the period from 2023 to 2028.
The sector has expanded in prevalence in the past few years as a result of evolving customer habits, growing urbanization, and a tech-savvy generation that prefers to make online purchases.
As per RedSeer, India’s quick commerce market is set for impressive growth, projected to expand by 10–15 times by 2025 and reach a market size of nearly $5.5 billion. This substantial growth is expected to surpass other markets, including China, in terms of quick commerce adoption.
As their standard of living increases and their daily schedules get tighter, consumers are flocking to customized and convenient internet platforms for grocery shopping instead of walking down to the local shops.
Following the COVID-19 pandemic, the popularity of online grocery delivery became increasingly evident. As a consequence of social distancing constraints, consumers are converting to online grocery shopping, which is not only convenient but also safer.
Aadit Palicha and Kaivalya Vohra, both 19-year-old childhood pals, founded Zepto after walking out of Stanford University’s renowned computer science department to return to their home country, India, and start up a business. The Zepto company began its operations in April 2021.
Kaivalya Vohra
Kaivalya Vohra is the CTO and Co-Founder of Zepto. He was also the founder and CTO of KiranaKart. He also attended Stanford University to pursue a degree in Computer Science, but like Aadit, he decided to leave the university. Kaivalya, along with Aadit, participated in Y Combinator as well.
Aadit Palicha
Aadit Palicha is the CEO and Co-Founder of Zepto. He was also the founder and CEO of KiranaKart. After completing an IB diploma from GEMS Education in Mathematics and Computer Science, Palicha then went for a Bachelor’s degree in Computer Science from Stanford University, however, he quit the program in the middle to launch his firm. Aadit then completed Y Combinator Grade: W21 and started with PryvaSee as a Project Lead. Aadit Palicha then founded GoPool, his first startup, when he was just 17. He left the same in April 2020 and founded KiranaKart and then Zepto.
Many of us have “startup ideas,” but even the most creative among us struggle to see them through. Palicha and Vohra had both enrolled at Stanford to earn a Computer Science degree but had dropped out to follow their business passions instead.
The story of Zepto started during the COVID-19 outbreak. The concept for Zepto sprang from the limitations of their houses. A surge in demand for delivery services meant that groceries and other necessities would arrive in a couple of days, creating a void for quick delivery. As a result, Zepto was created with all this insight.
These teenagers were abruptly detained, because of Covid norms, detained in their Mumbai homes after significant collaboration on many projects, including a ride-hailing commuting app for kids. Even while grocery delivery, which was deemed important by local authorities, was still permitted across much of the nation as the virus spread, the duo battled to get their provisions as the illness expanded.
While Zepto is the focus of attention, Palicha and Vohra’s first venture, KiranaKart, did not receive the same acclaim. Zepto, on the other hand, is inspired by KiranaKart. KiranaKart, as its name implies, was a supermarket delivery service. It had made arrangements with Kirana merchants to provide groceries in 45 minutes or less. A $730,000 pre-seed round was led by Global Founders Capital, 2 AM Ventures, Contrary Capital, and angel investors. At the time, Vohra and Palicha planned to make the first 1.5 lakh deliveries for INR 1.
As two bachelors living alone, the founders found it most difficult to obtain food, therefore, they focused their applications on grocery delivery. So, whereas KiranaKart, their first startup, tried to make grocery delivery easier for Kiranas, Zepto aims to shorten delivery times.
Zepto – Name, Logo, and Tagline
Zepto Logo
The firm, which uses the term “Zepto” to denote “a factor of 10⁻²¹, i.e. 0.000000000000000000001,” named after a minuscule unit of time, offers a 10-minute grocery delivery service, surpassing numerous well-funded competitors.
Zepto’s tagline says, “Groceries delivered in 10 minutes”.
Zepto – Business and Revenue Model
Zepto delivers groceries in ten minutes through a system of dark storefronts and mini-warehouses, on up to 90% of orders. Zepto works in the quick commerce segment of India. It is designed to be customer-centric and built around the instant service model.
To ensure a flawless delivery experience, Aadit says that their average delivery time is 8 minutes and 47 seconds. Through a chain of dark stores or retail distribution centers, the Mumbai-based company employs a hotspot method to cater largely to digital purchases.
A dark store is a tiny neighborhood storehouse that customers cannot visit but purchase online to get packaged delivery. While dark stores are not new to the Indian industry, Aadit believes that the idea has yet to be completely explored. Population, traffic dynamics, topography, road patterns, weather conditions, last-mile operational improvement, real estate prices, and other geographic data and local intelligence aid Zepto in optimizing its connectivity. Furthermore, the startup’s dark warehouses and cool rooms are custom-designed to satisfy particular criteria such as ease of travel, allowing packers to move as swiftly as possible to fill orders.
Location intelligence and geographic data, such as topography, population, road patterns, traffic dynamics, weather, last-mile supply availability, real estate values, and so on, are said to help Zepto optimize its network.
Zepto, the Mumbai-based quick commerce unicorn, achieved unicorn status in August 2023 after raising $200 million in a Series E funding round, which brought its valuation to $1.4 billion. This milestone marked the end of India’s 11-month unicorn drought. The Series E round was led by The StepStone Group, with participation from Goodwater Capital and existing investors.
In June 2024, Zepto raised $665 million, which valued the company at $3.6 billion. Just a few months later, on August 30, 2024, Zepto raised $340 million in Series G funding, which increased its valuation to $5 billion. The Series G round was led by General Catalyst, with Dragon Fund and Epiq Capital joining as new investors. Existing backers such as StepStone, Lightspeed, DST, and Contrary also increased their investments, reflecting strong confidence in Zepto’s growth potential.
In November 2024, Zepto raised another $350 million from a group of domestic investors, led by Motilal Oswal’s private wealth division, at a flat valuation of $5 billion. This brings the total funding raised by Zepto to $2 billion.
Glade Brook Capital Partners, Nexus Venture Partners, StepStone Group
Nov 8, 2023
Series E
$31.3 million
Goodwater Capital, Nexus Venture Partners
Aug 25, 2023
Series E
$200 million
StepStone Group
May 2, 2022
Series D
$200 million
Y Combinator Continuity Fund
Dec 20, 2021
Series C
$100 million
Y Combinator Continuity Fund
Oct 31, 2021
Series B
$60 million
Glade Brook Capital Partners
Mar 22, 2021
Series A
$6.5 million
Nexus Venture Partners
Sep 1, 2020
Pre Seed Round
–
Contrary
Zepto – Shareholding
Zepto Shareholding Pattern (as of October 2024)
Zepto shareholding pattern as of October 2024 (source: Tracxn):
Zepto Shareholders
Percentage
Aadit Palicha
0.9%
Kaivalya Vohra
0.7%
Nexus Venture Partners
18.6%
Glade Brook Capital
10.3%
StepStone Group
9.8%
Y Combinator
8.7%
LGF Scale I
7.8%
Rocket Internet
3.0%
General Catalyst
4.1%
Goodwater Capital
1.8%
Razor’s Edge Ventures
1.6%
Contrary
1.6%
Kaiser Permanente
2.3%
avra
1.3%
SpringBlue Capital
1.0%
Lightspeed Venture Partners
0.8%
Global Founders Capital
0.8%
Crimson
0.5%
Vanderbilt University
0.3%
Mangum
0.3%
Bayhouse Capital
0.2%
Mehta Ventures
<0.1%
Contrary Capital
<0.1%
Zpt Holdings
2.1%
AZ04
1.4%
Kiranakart SPV
0.6%
Sayacorps
0.4%
C Opportunities
0.1%
Jung Lish Lee
2.3%
Oliver Jung
0.7%
Oleg Wladimir Nicolas Tscheltzoff
0.2%
Aditi Javesh Jhaveri
<0.1%
Manoj Chawla
<0.1%
Kavit Dilip Palicha
8.0%
Jaideep Vohra
6.7%
Other Investors
1.0%
Among the shareholders, Nexus Venture Partners holds the largest stake, holding 18.6% of Zepto. Other prominent owners of Zepto include Y Combinator, Glade Brook Capital, StepStone Group, and co-founders Aadit Palicha (along with Kavit Dilip Palicha) and Kaivalya Vohra (along with Jaideep Vohra), among others.
Zepto – IPO
Zepto plans to go public in 2025. To prepare for its IPO, the company set up a new entity, Zepto Marketplace Private Limited, in October 2024 to simplify its operations. Zepto currently operates under a B2B model, sourcing products directly from brands and selling them to its partner companies, which then distribute the products to customers under a licensing agreement.
In January 2025, Zepto completed its domicile shift from Singapore to India ahead of its IPO, which is now expected to raise between $800 million and $1 billion, including secondaries. Initially, the company targeted a $450 million primary capital raise.
Zepto has hired Goldman Sachs, Morgan Stanley, and Axis Capital as advisors for the IPO. This marks a key step in its journey as a leader in the quick commerce industry.
Zepto has seen impressive growth, serving 10 major cities with 1,000+ employees. They deliver more than 5,000 products, revolutionizing the Indian grocery segment with 10-minute delivery, advanced tech, and optimized centers.
Engineering, operations, marketing, and financial positions are also available at Zepto. Palicha claims that month-over-month growth is 200%, with a monthly retention rate of 78%.
“We are looking at a pretty crazy runrate,” he said. “In the past one and a half months, we have grown our business by 10 times. And now we are working to grow another 10 times by February or March,” said Palicha in December 2021.
Zepto, when it was a five-month-old startup, had secured a valuation of $570 million after raising $100 million in a Series C round headed by Y Combinator’s Continuity Fund, which was a 2X increase from its previous valuation of $60 million only 45 days before that. Zepto raised another round led by Y Combinator to lift its valuation further to $900 million, so there is certainly impressive growth that the company has received in funding as well.
Another positive development for Zepto has been the expertise it has been able to acquire. Plenty of well-known senior executives from Uber, Flipkart, Dream11, Amazon, and Pharmeasy have joined the team.
According to Palicha, one of the reasons why several entrepreneurs have chosen Zepto is that it has enabled individuals who had transferred from Mumbai to Bangalore to come back to their homes. He says, nevertheless, that the startup’s rapid development, rigorous execution, and ambitions have captivated others who share his interests. “We’ve been able to walk the walk,” he said.
“They originally launched with a different model, swiftly pivoted to quick commerce in August 2021 and are now adding 100,000 new customers every week, 60% of them women. Their attention to detail on the logistics experience is unparalleled and this has enabled them to scale to most major metros in just 5 months. Simply put, we’re confident Zepto will win in this space over the long-term,” said Anu Hariharan, a partner at Y Combinator, in a statement.
Zepto has demonstrated significant growth in recent times, with the majority of its dark stores now operating profitably. According to co-founder and CEO Aadit Palicha, Zepto has successfully established its presence in major metro cities in India with over 300-400 dark stores. Impressively, approximately 50–60 percent of these dark stores have started generating cash flows, indicating the effectiveness of Zepto’s business model and operational strategies. This noteworthy achievement highlights Zepto’s commitment to sustainable growth and profitability in the fiercely competitive quick-commerce industry.
Zepto Financials
Zepto Financials FY24
Zepto Financials
FY22
FY23
FY24
Operating Revenue
INR 142.3 crore
INR 2,026 crore
INR 4,454 crore
Expenses
INR 532.7 crore
INR 3,350 crore
INR 5,754 crore
Profit/Loss
INR 390.3 crore (loss)
INR 1,272 crore (loss)
INR 1,248 crore (loss)
In FY23, the quick-commerce startup’s operating revenue stood at INR 2,026 crore. In FY24, Zepto’s operating revenue saw a growth of about 120%, reaching INR 4,454 crore.
Zepto’s losses saw a slight decrease of 2%in FY24, to INR 1,248.6 crore from INR 1,272 crore in FY23.
Expenses
In FY24, Zepto’s total expensessaw a massive rise of 71.6%, reachingINR 5,747 crore, up from INR 3,350 crore in FY23.
Zepto’s gross merchandise volume (GMV) surpassed $1 billion (INR 8,300 crore) in FY24, marking a significant milestone. The company also reported a 140% year-on-year growth, with 75% of its dark stores achieving full EBITDA positivity by May 2024.
Zepto has encountered some challenges lately, and in one of the recent ones, there were instances of founder and investor impropriety within the quick commerce delivery startup. Ansh Nanda, an alleged co-founder of the startup said that he was forced to relinquish his stakes in the startup by the other cofounders and by Nexus Ventures. This was carried forward by Nanda, who lodged an FIR against the cofounders of Zepto and the Nexus Ventures partner, Suvir Sujan. However, the co-founders responded to the same without much delay by approaching the Delhi High Court. Zepto is the third startup that is backed by Nexus and where one of the co-founders has been named in an FIR. YoloBus and Acko were two other companies that dealt with the same before.
Zepto – Controversies
A Delhi-based workers’ union, the Rajdhani App Workers Union (RAWU), has filed a complaint on 20th May, 2025, with the Delhi Labour Department against Zepto and its vendor, Kilton Geo Engineering Pvt. Ltd., alleging exploitative conditions for around 50 delivery workers recruited through Zepto’s Rural Mobilisation Program. The union claims workers were misled about wages, accommodation, and benefits, and faced wage deductions, poor living conditions, and unfulfilled promises of bonuses and free food. Zepto has responded by stating that it is investigating the matter and auditing vendors, while maintaining that the issue is localized and not representative of its broader operations.
Zepto – Advertisements and Social Media Campaigns
Zepto’s marketing strategy has been a key driver of its rapid growth in the quick-commerce industry. The creative brilliance of L&K Saatchi & Saatchi was evident in three earlier ads promoting Zepto’s products and services.
Building on this success, Zepto continued to impress with new campaigns featuring celebrated singers like Kailash Kher, Shankar Mahadevan, and Usha Uthup during the IPL season of 2022. These unique and melodic campaigns resonated with audiences, boosting Zepto’s visibility and brand appeal.
Furthermore, the launch of the “Nahi Milega” campaign in March 2023, featuring the character “Uncle Ji,” highlighted unlimited free deliveries, solidifying Zepto’s position as the go-to platform for ultra-fast and cost-effective grocery delivery. With an innovative approach and successful marketing initiatives, Zepto has emerged as a leading player in the competitive quick-commerce industry, catering to the needs of time-conscious consumers.
Dunzo is another startup, that uses its Xpress Mart dark shop network to deliver groceries in Bengaluru in 19 minutes and competes with Zepto.
Zepto – Future Plans
Zepto currently operates in major cities across India, including Bengaluru, Mumbai, Delhi, Gurugram, Noida, Ghaziabad, Hyderabad, Chennai, Pune, and Kolkata. The company has ambitious plans to multiply its dark stores and expand its delivery network with profitability in focus.
Zepto has sped up its store expansion, increasing its target from 700 to 1,200 stores by March 2025. With over 650 outlets in operation as of January 2025, the company is strengthening its presence in the quick commerce space.
A new key driver of Zepto’s growth is its food and beverage division, Zepto Café, which is currently in 15% of its dark stores. With an estimated ARR of INR 160 crore, Zepto Café is expanding rapidly, adding over 100 outlets monthly and targeting an INR 1,000 crore revenue run rate by FY26.
The company is projecting gross sales of $5.5 billion in the final quarter of FY26, with an aim to achieve positive EBITDA (excluding ESOPs).
The ultimate goal is to become a publicly listed company. Co-founder and CEO, Aadit Palicha, has expressed optimism about Zepto’s IPO in 2025.
FAQs
What is Zepto?
Zepto is a startup based in Mumbai that offers a 10-minute grocery delivery service.
Who owns Zepto?
Zepto owners are Aadit Palicha and Kaivalya Vohra, two childhood friends.
Zepto started in which year?
Zepto was founded in September 2020 and began operations in April 2021.
How Zepto started?
Zepto was started in 2021 by Aadit Palicha and Kaivalya Vohra, two Stanford dropouts, to deliver groceries quickly. They began in Mumbai with a 10-minute delivery model, using dark stores to fulfill orders fast.
Which companies does Zepto compete with?
Swiggy Instamart, BigBasket, Blinkit, and Dunzo are some of the top competitors of Zepto.
How does Zepto delivery work?
Zepto delivers groceries in 10 minutes through its network of dark stores and micro-warehouses. The median delivery time is 8 minutes and 47 seconds, ensuring a swift and efficient delivery experience.
Is Zepto a unicorn startup?
Zepto became the first Indian unicorn startup in 2023 after raising a Series E round worth $200 million in August 2023. This round increased Zepto’s valuation to $1.4 billion.
Is Zepto publicly listed?
No, Zepto is planning to go public in 2025 with its IPO, which is expected to raise between $800 million and $1 billion.
Which is Zepto parent company?
Zepto parent company is Kiranakart Technologies Private Limited.
According to a media outlet report, Zepto, a quick commerce startup, is thinking of raising the amount of its initial public offering (IPO) to between $800 million and $1 billion, including secondary shares.
The company’s intentions for a public offering, which include an expected $5.5 billion in gross sales for the last quarter of FY26 with positive EBITDA (excluding ESOPs), were recently discussed by CEO Aadit Palicha with large mutual funds. According to the article, which cited brokers, this estimated amount is approximately equal to the rapid commerce industry’s total gross sales for the prior calendar year.
In mid-2024, the corporation started preparing for its initial public offering (IPO), initially aiming for $450 million in primary capital. The business is considering a range of at least $800 million or more, according to a source cited in the paper. This includes an enhanced primary fundraise and the possibility of selling at least $300–400 million worth of shares in an Offer for Sale (OFS).
Zepto Writing a New Success Story
By surpassing 900 dark stores, Zepto has surpassed expectations and is aiming to reach 1,000 locations. This development is a component of a larger plan to concentrate on growing the company and guaranteeing profitability. At the moment, Zepto receives between 1.1 million and 1.3 million orders every day. Sales of non-food items such as clothing, electronics, and miscellaneous merchandise now account for INR 200 crore of the company’s monthly revenue.
Increasing its domestic ownership is one of Zepto’s other main objectives. Prior to filing for its IPO, the company wants to have at least 40% of its shares held domestically. Zepto is moving its domicile to India as part of this process by combining its Singaporean parent business with an Indian organisation.
Zepto’s IPO
With plans to add more firms closer to the offering, Goldman Sachs and Morgan Stanley are among the lead banks for Zepto’s initial public offering. As it competes with rivals like Flipkart Minutes, Blinkit by Zomato, and Swiggy Instamart in the quickly expanding industry, Zepto secured $350 million in a financing round in November 2024, increasing its total cash reserves to almost $1.4 billion. Although Zepto’s IPO pricing is still up in the air, the firm is thinking of comparing its KPIs to those of Blinkit.
Zepto has lost a lot of money despite its expansion, spending between INR 1,000 and 1,100 crore in the previous three months to fight with its main rivals. According to the various media reports, Zepto’s high burn rate helped it grow its network of dark stores in both existing and new areas, bringing its gross sales to $3 billion, just below Blinkit’s $3.7 billion. Although it too experienced an adjusted EBITDA loss of INR 103 crore, Blinkit claimed a 120% year-over-year rise in gross order value for the December quarter, hitting INR 7,798 crore.
According to a media outlet, Zepto, a quick commerce platform, is expected to submit its initial public offering (IPO) draft papers in March or April of this year. The delivery company has already obtained the necessary authorisations to relocate its headquarters from Singapore to India.
The business stated that the IPO’s specifics are still being finalised and that it has scheduled a board meeting for January 19 to talk about the size of the IPO, the selection of independent directors, which bankers to hire, and other specifics.
Notably, the National Company Law Tribunal (NCLT) is set to hear the case on January 17 even though Singaporean officials have approved the move. After food delivery services Zomato (Blinkit) and Swiggy (Instamart), parent firms of listed competitors, Zepto will become the first rapid commerce start-up to go public if all goes as planned by April.
Zepto Marketplace Reshaping the B2B Model
In order to shift its business-to-business (B2B) activities to a marketplace model, Zepto has created a new company called Zepto Marketplace. After the operational and regulatory details are resolved, Zepto Marketplace, which was registered in October 2024, will soon transition to the new format, according to sources. According to media reports, the change would give Zepto more control over service and quality assurance. Zepto plans to further improve operations by launching “Thor,” a SaaS inventory management platform, soon. Marketplace models are already used by Zepto’s competitors, such as Blinkit and Swiggy Instamart.
Current Business Model of Zepto
Geddit Convenience, Drogheria Sellers, and Commodum Groceries are the three businesses to which Zepto licenses its brand name and business operations under the current arrangement. These three businesses use the Zepto platform to sell to final customers after buying their merchandise from Kiranakart Technologies Pvt Ltd.
Kiranakart Technologies is essentially a business-to-business (B2B) company that sources and purchases goods directly from brands and resells them to Zepto’s three licensee businesses. These businesses subsequently sell to final customers. The three businesses pay Zepto a licensing fee for each sale they make through the latter’s platform.
According to sources, Zepto has already added additional sellers and plans to continue growing its seller and distribution base with the assistance of the new organisation. It also plans to lessen its focus on the three businesses (Geddit Convenience, Drogheria Sellers, and Commodum Groceries). Other than Geddit Convenience, Drogheria Sellers, and Commodum Groceries, more sellers are probably going to start selling on the Zepto platform in the upcoming months.
In FY24, Zepto’s operating revenue increased by 120% to INR 4,454 crore. Additionally, the business plans to release a distinct app for Zepto Cafe, which offers speedy food delivery services for snacks and other things.
According to various media reports, Zepto, the unicorn of rapid commerce, has established Zepto Marketplace Private Limited as a new company to streamline its business practices before going public later this year. Currently, the business uses a business-to-business (B2B) form of operation. Under a licensing arrangement for consumer-facing sales, its Indian subsidiary, Kiranakart Technologies Pvt Ltd, which was established by Aadit Palicha and Kaivalya Vohra, purchases products from brands and sells them only to a specific group of businesses that run the Zepto platform.
Its competitors, like Swiggy Instamart and Blinkit, which is owned by Zomato, have long used a marketplace model that allows several suppliers to post goods directly for customers. Zepto now seems to be doing the same. In an apparent indication of a potential departure from its business-to-business approach, it registered Zepto Marketplace Private Limited on October 22, 2024. As it completes preparations for an India IPO later this year, this change may bring Zepto’s operations closer to those of its publicly traded competitors, Blinkit and Swiggy Instamart.
The Move will Help Investors to Evaluate Zepto’s Operations
Investors, particularly those in the public market, will be better able to compare Zepto‘s operating data to those of its competitors once a consistent business model is established. Another media article, however, made it clear that the new corporation was simply registered in order to transfer the company’s tech-related intellectual property (IP) and online platform. According to this report, the decision to place the company’s technology division on a separate balance sheet will aid in separating the various business divisions.
Current Business Model of Zepto
Geddit Convenience, Drogheria Sellers, and Commodum Groceries are the three businesses to which Zepto licenses its brand name and business operations under the current arrangement. These three businesses use the Zepto platform to sell to final customers after buying their merchandise from Kiranakart Technologies Pvt Ltd.
Kiranakart Technologies is essentially a business-to-business (B2B) company that sources and purchases goods directly from brands and resells them to Zepto’s three licensee businesses. These businesses subsequently sell to final customers. The three businesses pay Zepto a licensing fee for each sale they make through the latter’s platform.
According to sources, Zepto has already added additional sellers and plans to continue growing its seller and distribution base with the assistance of the new organisation. It also plans to lessen its focus on the three businesses (Geddit Convenience, Drogheria Sellers, and Commodum Groceries). Other than Geddit Convenience, Drogheria Sellers, and Commodum Groceries, more sellers are probably going to start selling on the Zepto platform in the upcoming months.
Competitors Adopting Different Approach
Blinkit is a platform where businesses like Hands On Trade, 90Minutes Retail, and others buy products from brands and resell them to B2B wholesalers, who resell them to other businesses (B2C sellers). Zomato, the holding company of Blinkit, appears to have structured its operations to guarantee adherence to foreign direct investment (FDI) regulations while avoiding the purview of related party reporting and consolidation.
International e-commerce firms are able to function autonomously as marketplace enterprises in India. However, international retail corporations are not allowed to operate independently in offline retail due to restrictions governing foreign direct investment (FDI). Only 51% of foreign direct investment (FDI) in multi-brand retail is permitted, and only through local partnerships. Even then, permission from the government is needed.
Under the government clearance method, however, 100% FDI is permitted in food retail to function and operate both online and offline for food that is made and manufactured in India. With businesses like Scootsy, Lynk Logistics, and others that function as B2B wholesalers, Swiggy Instamart has also created a company structure that is similar. These businesses then sell their goods to other businesses that run dark stores, which in turn sell to the B2C vendors on the Swiggy network.
In short, there is an extra layer of sellers and distributors on both Blinkit and Swiggy Instamart. Although Zepto lacks this additional layer, it is possible that the structure will alter if Zepto Marketplace Pvt Ltd is established.
