Alleging exploitative tactics under Zepto’s Rural Mobilisation Programme (RMP), the Rajdhani App Workers’ Union (RAWU) has filed a complaint against Zepto and its third-party vendor, Kilton Geo Engineering Pvt. Ltd., with the Delhi labour department.
According to the union, gig workers—whom Zepto refers to as “delivery partners” and who were primarily hired from rural states—were misinformed about their pay, housing, and working conditions.
The file was made at a time when fast commerce companies are struggling with a short-term delivery staffing scarcity because of increased demand. The issue has been forwarded to a labour inspector by the labour department. As part of the investigation process, RAWU anticipates notifying Zepto, the third-party provider, and a subset of impacted employees.
Zpeto’s Response to Such Allegations
Zepto explained that while it offers the technology and clear standards, store management is in charge of day-to-day operations and vendor control. According to a Zepto representative who spoke to a media outlet, the company does not have a concept for “temporary IDs” and does not provide riders with a joining bonus under RMP.
The spokesperson went on to say that this seems to be a local problem and does not represent the RMP’s larger goals or operations. According to the corporation, an audit into the issues surrounding Kilton Geo Engineering has been started.
Involvement of Third-Party Vendors Creates Complex Situation: Experts
Experts point out that although Zepto considers third-party vendors to be partners, their participation creates a complicated scenario in which workers are neither truly platform employees nor expressly covered by labour regulations.
At the moment, vendors are not considered “aggregators” or “employers” under the law. Platforms in the gig economy frequently use outside vendors to hire workers, according to a media report. There are no formal agreements between the vendor and the employees, according to Sunand, president of the RAWU, which is connected to the Centre of Indian Trade Unions (CITU).
The Contract Labour (Regulation and Abolition) Act of 1970 forbids businesses from exporting work in order to avoid accountability and safeguards contract workers, who are frequently denied formal employment rights.
Interstate Migrant Workmen Act
When labourers are hired from one state to work in another, as is the case with many gig workers travelling to Delhi from Uttar Pradesh, Bihar, and Jharkhand, the Interstate Migrant Workmen Act is applicable, according to a media report.
According to this rule, contractors must get permits and give migrant workers benefits. Even though the platform distances itself from direct hiring, it could still be held accountable because Section 18 holds the principal employer accountable if the contractor fails to fulfil these obligations.
This development coincides with a broader delivery staff scarcity brought on by the rapid commerce industry’s growing demand.
Deepinder Goyal, the founder and CEO of Eternal Ltd., wrote a letter to shareholders after the Q4FY25 results, stating that the growth of food delivery had slowed down for three main reasons.
One of these was the temporary lack of delivery partners, which was caused by the high demand for delivery partners in quick commerce given the industry’s recent rapid expansion.
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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.
Zepto, a leader in quick commerce, has introduced Atom, a new data analytics tool for consumer businesses that are listed on the site. Aadit Palicha, the CEO and co-founder of Zepto, stated in a video on X that the subscription-based service will allow marketers to learn more about behavioural data, “pincode-by-pincode market share data, and brand performance.”
According to Palicha, Atom will enable retailers to analyse a real-time map of each neighbourhood and pincode they service in order to obtain hyperlocal performance insights. He went on to say that a company can use Zepto Atom Maps to determine that its sales in Hyderabad’s western neighbourhoods are under-indexed.
Then, it can focus more on price, marketing, or distribution in those areas to spur growth. Furthermore, the business claims that Zepto Atom would provide brands with “minute-by-minute” sales, consumer impressions, and conversion data, allowing them to tailor their pricing, advertising campaigns, and product offerings to the various consumption patterns of their goods throughout the day.
Zepto GPT
The CEO of the fast commerce behemoth added that Atom has Zepto GPT, an internal natural language processing (NLP) helper, to respond to merchant enquiries. He claimed that the chatbot, which was educated using internal corporate data, will provide insights for enhancing brand performance.
Palicha continued, “Zepto GPT then analyses the extensive datasets within Zepto Atom to provide strategic recommendations, actionable answers, and even data reports on behalf of the brand.”
Additionally, according to the business, the new data analytics tool will give brands information on customer retention and repeatability, voice share in search and on the home page, full-funnel visibility into consumer product purchase behaviour, etc.
Zepto Creating Alternate Revenue Stream
By charging specified brands, Zepto is probably trying to generate an additional source of income. On the other hand, Atom’s pricing structure remains unclear. The platform’s free Zepto Brand Portal, which provides brands with basic information about their success on the platform, will be supplemented by the Zepto Atom subscription.
According to Palicha, the value of the Zepto Atom membership lies in the advanced insights that companies can obtain from this tool, the majority of which are currently unavailable on any Indian e-commerce platform. Zepto has ventured into the B2B SaaS market with Atom, following rival Zomato’s lead.
In February of this year, the Deepinder Goyal-led company introduced Nuggets, an AI-powered, no-code customer support platform for businesses. However, Zepto is using the network effects of its own platform to boost its top line, in contrast to Zomato, which is concentrating on external consumers.
The rapid commerce market is becoming more competitive as a result of the new offering. Companies like Flipkart Minutes, Zepto, Swiggy Instamart, BigBasket, and Eternal-owned Blinkit are spending billions of dollars to expand their dark shop count and attract more clients.
The development also occurs one day after it was revealed that Zepto had reduced the number of foreign shareholders in the business by bringing Motilal Oswal and Raamdeo Agrawal, the founders of the company, to its cap table through a $100 million secondary sale.
The deal is a component of a bigger $350 million round, in which Motilal Oswal’s clients—including domestic family offices—will absorb the remaining funds.
According to a media report, Motilal Oswal and Raamdeo Agrawal, co-founders of Motilal Oswal Financial Services, have contributed a combined $100 million to Zepto, a startup in the fast commerce space.
The company, Motilal Oswal, is getting ready to spearhead a $250 million secondary share offering in Zepto in addition to his personal commitments. Hero FinCorp and Edelweiss Financial Services are also anticipated to take part in the round.
The money raised would go towards buying shares from current foreign investors. General Catalyst, Nexus Venture Partners, StepStone Group, Y Combinator, Goodwater Capital, and Glade Brook Capital are some of the current foreign investors in Zepto.
The Move is Aligned with Zepto’s Strategy to Increase Domestic Ownership
The action is a component of Zepto’s continuous plan to boost domestic ownership. Prior to its anticipated public listing, the company has been actively pursuing its goal of becoming a 75% Indian-owned business.
Zepto wants to adhere to investor and regulatory preferences that support local ownership in strategically significant industries by enabling secondary transactions between foreign and domestic investors. Additionally, this fundraising comes after Motilal Oswal Private Wealth led a $350 million first capital round in November 2024, which kept Zepto’s valuation at $5 billion.
High-net-worth individuals and Indian family offices participated in that round. Additionally, it is Raamdeo Agrawal’s second investment in Zepto, following his $15 million personal investment in October 2024 and his unannounced August investment.
Traxcn data shows that Zepto has raised $1.95 billion in ten financing rounds to date. Zepto raised $665 million in a Series F investment in June 2024, which was the company’s highest funding round to date.
The Present State of the Quick Commerce Industry in India
According to industry data, the rapid commerce business in India has expanded by 280% in the past two years, and the top three companies, Blinkit, Zepto, and Swiggy Instamart, have combined to generate over $1 billion in revenue for FY24.
This occurs as Indian businesses are stepping up their rapid commerce solutions. Amazon India is getting ready to debut its rapid commerce service, Tez, while Myntra recently introduced M-Now for 30-minute- to 2-hour deliveries.
E-commerce and other retail formats are being disrupted by quick commerce, which, according to a recent Bernstein analysis, is expanding more quickly than contemporary retail chains like Reliance Retail, Dmart, and Spencer Retail. This is one of the reasons why consumer platforms are responding to the shift by preparing to deliver a variety of goods outside of groceries in 10–20 minutes.
For over INR 1,500 crore (more than $175 million) in structured debt, Zepto founders Aadit Palicha and Kaivalya Vohra are in advanced discussions with Edelweiss Alternative Asset, local family offices, and smaller credit funds.
According to a report, the acquisition aims to assist the fast commerce company consolidate local control ahead of its planned initial public offering (IPO) by purchasing shares from current international investors. Edelweiss has made a legally binding offer.
The loan includes a minimum interest rate of 16% and an equity-linked upside that could raise total profits to almost 18%. According to various media reports, it is being carried out at a valuation of over $5 billion, which is the same as when Zepto sought equity financing the previous year.
Binding Term Sheet by Edelweiss
With a three-year term, the deal is anticipated to close by July, with Edelweiss serving as the primary underwriter. Edelweiss will anchor the rise by contributing half of the money and has provided a firm term sheet.
Family offices and smaller credit funds are contributing the remaining INR 750 crore, and it is anticipated that they will do so on the same terms. According to the company’s IPO valuation, they might wind up making an 18% return, the individual continued.
The promoter-level purchase funding will enable the Zepto founders to raise their ownership position in the business from the current 18% to about 20%. Once the acquisition is finalised, Zepto’s domestic shareholding is expected to rise to around 30%, according to a report. Y Combinator, General Catalyst, and Nexus Venture Partners are some of its largest backers.
Ownership Dynamics
The founders are making the transition to ensure that they satisfy the Indian ownership threshold and comply with foreign direct investment (FDI) regulations that govern online retail. This could be essential for regulatory clearances and initial public offering (IPO) eligibility.
India’s FDI regulations prohibit FDI in inventory-led e-commerce but permit 100% foreign investment in online marketplace models. Inventory-led models can only be lawfully operated by Indian Owned and Controlled Companies (IOCCs).
A business must have more than 50% Indian ownership and control in order to be eligible as an IOCC. The board of Eternal, the publicly traded parent company of Zomato, adopted a plan on April 19 to limit foreign ownership of the company to 49.5%, the company informed stock exchanges.
The objective of the action was to grant Blinkit “greater operational flexibility” by enabling it to maintain inventory, rather than exclusively operating as a marketplace, as mandated by India’s foreign investment regulations.
Zepto arrangement “is classic promoter financing—a high-yield debt deal with embedded equity upside.” However, securing a commitment of promoter stock is uncommon for Indian new-age tech enterprises, particularly those with a significant cash burn.
According to reports, the Delhi High Court (HC) has sent notifications to Zepto and Swiggy. This notice has been sent as their respective applications’ complicated user interfaces for those with visual impairments.
The HC made the ruling after a hearing on a petition submitted by the non-governmental organisation Mission Accessibility. Justice Sachin Datta gave the Ministry of Electronics and Information Technology (MeitY) and both platforms four weeks to reply.
The petition, spearheaded by accessibility advocate Amar Jain, contends that both platforms have not guaranteed compatibility with screen-reader software in spite of legislative requirements under the Rights of Persons with Disabilities (RPwD) Act, 2016. According to the petition, visually challenged individuals are unable to browse products or place orders on the two sites on their own because screen reader software is not included.
The argument contends that these apps’ inaccessibility denies people with disabilities (PwDs) equitable access to basic services like grocery shopping and meal delivery. Hence, infringing on their constitutional rights. The next hearing on the case has been set for May 28 by the court.
Rapido Also Navigating in Same Waters
This comes after a comparable incident with the unicorn ride-hailing service Rapido. In September 2024, while considering a plea filed by Jain and visually challenged banker Dipto Ghosh Chaudhary, the Delhi High Court ordered Rapido to provide an accessibility audit and compliance report within three months.
Users with disabilities encountered challenges in accessing services due to Rapido’s app’s lack of compatibility with screen-reading software, as emphasised in the petition. Rapido responded by promising to update its software within six to eight months to comply with accessibility guidelines.
Rapido Failed to Fix the issue
The high court voiced its displeasure with Rapido’s progress during a March hearing. The ride-hailing app was given a four-month deadline by the court to address accessibility concerns or “pack up from India”.
The judge also asked how Rapido was permitted to operate without adhering to current handicap access legislation during the hearing.
Rapido’s audit report, which was presented to the High Court, identified 81 significant accessibility failures and 170 accessibility problems at Level A of the fundamental Web Content Accessibility Guidelines (WCAG).
Notably, both cases highlight the growing judicial scrutiny of Indian internet companies for not adhering to digital accessibility requirements set forth by Indian legislation, specifically the RPwD Act of 2016.
According to reports, the Confederation of All India Traders (CAIT) has demanded that a “luxury tax” be applied to all transactions made through online marketplaces. The traders’ organisation suggested enforcing the levy under the goods and services tax (GST) regime, according to a media report.
The remarks were made in New Delhi at CAIT’s national colloquium on the subject of “the cruel face of quick commerce and e-commerce”. In order to safeguard the interests of small firms, CAIT’s secretary general emeritus Praveen Khandelwal allegedly advocated for the establishment of new policy mandates to “immediately enforce” FDI laws for the e-commerce sector, especially rapid commerce.
After careful consideration, the Indian government has nearly finished draughting the e-commerce policy, according to Khandelwal. CAIT believes that in order to protect the nation’s retail democracy, the time has come to enact the e-commerce policy and e-commerce regulations under the Consumer Protection Act.
Traders Body to Submit Recommendations to Ministries
The traders’ group declared that it will make suggestions to the ministries of consumer affairs and commerce. These recommendations will highlight the difficulties faced by retail dealers as a result of the fast commerce platforms’ explosive growth.
CAIT members claimed at the conclave that wealthy rapid commerce platforms are expanding in major cities and using aggressive discounting strategies to corrupt the retail industry. They said that small mom-and-pop store owners are being forced to close as a result of this.
Khandelwal went on to say that although rapid commerce is a brand-new industry, there is currently no regulatory framework in place. The body asks the government to establish a separate regulatory agency for digital commerce that will oversee both rapid commerce and e-commerce platforms.
Additionally, CAIT recommended the government outlaw inventory-led online marketplace models. The Centre should also create regulations that guarantee online platforms can only offer products to final consumers through third-party vendors.
In addition, the trade association stated that its affiliate groups, including the All India Mobile Retailers Association (AIMRA) and the All India Consumer Products Distributors’ Federation (AICPDF), will approach the human rights commission to guarantee the “well-being” of gig workers.
In order to establish accountability and supervise e-commerce and quick-commerce platforms, CAIT has recommended the establishment of an independent regulatory authority.
Quick Commerce Changing the Dynamics of Online Shopping
The development occurs at a time when rapid commerce platforms have revolutionised online shopping in India by establishing new standards for convenience and speed.
In fiscal year 2023-24 (FY24), the three fast commerce majors—Zomato-owned Blinkit, Swiggy Instamart, and Zepto—recorded a combined top line of $1 billion. While Amazon, Nykaa, and Myntra are also testing similar products, e-commerce powerhouse Flipkart also entered the rapid commerce space last year with Minutes.
According to reports, the Competition Commission of India (CCI) has received a petition from the All India Consumer Products Distributors Federation (AICPDF) accusing Blinkit, Zepto, and Swiggy Instamart of monopolising the market and charging unjust prices. According to a media report, AICPDF President Dhairyashil Patil made the petition. According to the petition, hyperlocal delivery and speedy trade have grown in popularity in recent years. Fast and effective delivery services are defined by the term “quick commerce.” Products are typically delivered in a matter of minutes. The group also charged that these rapid commerce companies were influencing market competition by offering steep discounts and engaging in exclusive supply and distribution contracts. According to the petition, these activities have a detrimental effect on almost 10 million offline mom-and-pop shops nationwide.
Not a New Issue
The authority asked Piyush Goyal, the union minister of commerce, in a letter last year to closely examine the fast commerce giants’ explosive expansion. In order to safeguard small business owners, it also asked the government to control the rapid commerce area. The AICPDF complaint was later forwarded to the CCI by the Department for Promotion of Industry and Internal Trade (DPIIT). The authorities’ persistent efforts to suppress quick commerce companies coincide with Blinkit, Instamart, and Zepto’s rapid growth and the loss of traditional retail establishments’ clientele. The three main businesses are competing for market share in the nation’s fast-food delivery, grocery, and home basics sectors, as well as 10-minute ambulance services. E-commerce giants like Amazon and Flipkart are working to increase their product offerings in this market as a result of this influence.
Voices Rising Against 10 Minutes Delivery Game
Concerns about the 10-minute delivery trend are still growing. According to a report last month, the National Restaurant Association of India (NRAI) was thinking of bringing a CCI action against Zomato and Swiggy in order to prevent their 10-minute meal delivery standalone apps, Bistro and Snacc, from being launched. Furthermore, according to a broking study by ICICI Securities, although these businesses continue to use discounts to draw clients, the item-level discounting strategy has lost some of its allure between November 2024 and January 2025. It is important to remember that Zepto, Instamart, and Blinkit together generated over $1 billion in revenue in FY24.
Rapid Commerce Conflict
The rapid commerce industry has evolved into a high-cash-burn sector, with companies allocating billions towards expansion and client acquisition. Industry estimates indicate that the aggregate monthly cash burn of rapid commerce entities, including new entrants, ranges between INR 1,300 and 1,500 crore—more than double in recent months.
Despite nearing operational breakeven in Q2 FY25, Blinkit’s losses escalated in Q3 FY25, with operating losses rising to INR 103 crore from INR 8 crore in the preceding quarter. Swiggy reported a net loss of INR 799 crore, while Instamart had an adjusted EBITDA loss of INR 578 crore in Q3, compared to INR 358 crore in Q2. Zomato’s ability to continue investing in Blinkit stems from its financial stability. In November 2024, Zomato secured INR 8,500 crore in a qualified institutional placement (QIP) to enhance its balance sheet and finance its rapid commerce operations. As of December 31, 2024, Zomato possessed cash reserves amounting to INR 19,235 crore, providing adequate liquidity to support Blinkit’s expansion.
The convenience of Internet food delivery services was greatly enhanced during the pandemic. The dominant player in the online grocery delivery app and company market is influencing users’ habits.
Online shopping is becoming increasingly common among consumers. As a result, more and more delivery services, like Zepto, have launched their services to meet the ever-increasing demands of their clients for lightning-fast delivery. You should be familiar with the Zepto business model if you are looking to enter the market.
The supermarket delivery industry is booming, thank goodness, because it requires less time, effort, and money than other industries. In 2020, the projected value of the online grocery business was $2.9 billion. Through this article, we will go over the basics of Zepto, including its business model and how it generates revenue.
About Zepto
Zepto, founded in 2021 by Aadit Palicha and Kaivalya Vohra, two former Stanford University students, is a platform for quick commerce that provides a grocery delivery service within 10 minutes. Fast grocery delivery was the driving force for the founding of the firm. Zepto boasts delivery to major cities like Bengaluru, Lucknow, Delhi, Chennai, etc., from its Mumbai headquarters. The original company, Kiranakart Technologies Private Limited, was turned off into Zepto by its founders.
The “dark store model” serves as the foundation for Zepto’s business model. This involves setting up delivery-only warehouse-style stores in residential regions. The shops sell a variety of products, and the sole way for buyers to place orders is through the Zepto India website or app. Across multiple regions, Zepto now has more than eighty-six dark storefronts. Dark businesses are great for quick shipping, but they may crash under heavy traffic. However, Zepto created an AI-driven system to assist with selecting, packing, and shipping to avoid sacrificing quality or service. Zepto can provide an extensive product line at rock-bottom prices because of this technology, which guarantees a seamless transition from choosing to packaging to delivery.
Zepto India can provide a fast delivery service thanks to the convenience of having outlets close to customers’ homes, which is an advantage of the Zepto business model. The elimination of the necessity for employees to utilize the store also allows the company to run with a reduced headcount.
How Zepto Makes Money | Zepto Revenue Model
A little commission is charged for each order placed using the Zepto Grocery app in India. Helping to pay the costs of running the app and ensuring that consumers have a great experience, this commission is usually 2-3% of the total order amount.
With almost $1.3 billion raised across eight rounds, Zepto is certainly a no-money lightweight, making it the first unicorn startup of 2023.
In recent times, the Zepto business model has experienced tremendous expansion. Their incomes increased by 800% while their burn rate per order reduced by 5%. The reason for this rise is that Zepto boasts a 50% growth rate per month.
Here’s an easy-to-understand version of Zepto’s revenue model:
Sales of Products: Zepto makes money by selling groceries, home goods, and personal care items on its website. They buy products from local suppliers and brands, keeping prices low. Sometimes, they charge a little more for certain items compared to regular stores, which helps boost revenue.
Delivery Charges: Zepto charges a delivery fee based on factors like how far the delivery is, the order size, or any special deals. This fee helps cover the cost of fast delivery and brings in extra money.
Subscription Models: Zepto offers membership plans for regular customers, giving benefits like free delivery or special discounts. This makes it easier for frequent buyers to make purchases.
Advertisement and Promotions: Zepto partners with brands for advertisements on their platform. Brands pay to get more visibility. They also create special offers or coupons in the app to attract more customers.
Data Monetization: Zepto collects useful data from customers. They can sell insights from this data to brands and suppliers to help them understand customer behavior and improve their products.
Fulfillment and Logistics: Zepto could offer its delivery and logistics services to other businesses, creating another source of income.
New Category Expansion: Zepto may expand beyond groceries to sell other items like electronics, health products, or prepared meals, increasing their revenue streams.
Challenges and Considerations
Pricing Pressure: Zepto must balance keeping prices low and offering fast delivery while making a profit.
Customer Retention: Zepto needs to keep customers loyal with great service and rewards programs.
Operational Efficiency: Zepto must keep its delivery and logistics system efficient to control costs and maximize profits.
Zepto Financials
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)
Zepto Financials FY24
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.
Customers in a rush will be enticed by Zepto’s promise of ultra-fast delivery—a mere 10 minutes—since the company dominates this segment.
Zepto has been aggressively growing its presence in key Indian cities, particularly in metro and big urban areas, to guarantee the quickest delivery times imaginable.
Zepto SWOT Analysis
SWOT Analysis of Zepto
Zepto Strength
Zepto can process orders more quickly and efficiently thanks to its dark store and speedy packaging. Several distribution options are made available by micro and cold warehouses, which physically deliver groceries closer to a certain market group.
To maintain an up-to-date procedure and an app that is easy to use, Zepto makes use of a broad variety of software. Put together a crack team of professionals who are well-versed in all things related, such as data analytics, software development, and artificial intelligence. As a result, the market delivery system is more within the company’s control.
Zepto Weakness
Customers are less likely to purchase due to the lack of high-quality product images.
Delivery is only offered in a limited number of areas. There is a limit on their ability to invest in marketing or expand operations due to limited human, or infrastructure resources.
Zepto Opportunities
Zepto may explore opportunities to extend its business operations internationally by entering new markets and expanding its clientele on a global scale.
When new technology or industry trends emerge, Zepto may have opportunities to expand its product and service offerings or create innovative solutions.
Zepto Threats
Rules and regulations or the need for regulations and developments pertinent to Zepto’s sector can complicate compliance and increase operational expenses.
To retain customers over the long term, Zepto must fulfill its word and deliver on time every time. Failing on this line means a massive loss of business.
Zepto’s founders assert that the additional acquisitions will strengthen the company’s ability to connect with customers and improve its level of service. As of this very moment, Zepto is operational in the metros of India. In any case, the company has not disclosed its consumer calculation; however, several sources claim that Zepto is growing at a rate of 200% per month.
For a company to achieve success, it takes a lot of things, and Zepto has everything. They have a fantastic team, are quick to act, and are focused on their goals. In addition to this, they planned their entrance into the supermarket delivery market with great precision. Even though they have only been in operation for a few years, they have already raised the expectations of their customers and are heading towards a company strategy that is more focused on the client.
FAQs
What is Zepto?
Zepto is a startup based in Mumbai that offers a 10-minute grocery delivery service. To fulfill orders promptly, Zepto employs its network of ‘cloud shops’ or micro-warehouses.
What is business model of Zepto?
The “dark store model” serves as the foundation for Zepto’s business model. This involves setting up delivery-only warehouse-style stores in residential regions.
What is the valuation of Zepto?
The valuation of Zepto is $3.6 billion as of June 2024.
What is Zepto seller commission?
Zepto currently does not use a seller commission model. It profits from direct product sales, delivery charges, and other revenue streams like ads and data.
What is Zepto USP?
Zepto’s USP is ultra-fast delivery of groceries and essentials, often within 10-15 minutes, through its network of dark stores located near customers.
What is Zepto dark store model?
Zepto’s dark store model involves setting up delivery-only warehouse-style stores in residential areas. These stores are not open to the public, and customers can only order through Zepto’s website or app. This model allows for faster delivery and reduced overhead costs, as the stores are optimized for picking, packing, and shipping products efficiently.
Beyond Chennai, Zepto, a fast commerce startup based in Bengaluru, has already established itself throughout Tamil Nadu. Coimbatore, Tiruchirappalli, Madurai, Vellore, and Salem are just a few of the districts in the state where the company has started operations. With more than twenty dark stores open in Tamil Nadu, each one well situated to maximise delivery within two to three kilometres, enabling partners to transport purchases in ten minutes while staying safe, Zepto is poised to solidify its position in the state.
Going Vocal for Local
Zepto users and other clients can purchase delicate coconuts and green vegetables from over 100 farmers in Tamil Nadu, including Palacode and Pollachi. This provides Zepto with a much-needed local connection. With its vibrant cities and high desire for convenience, the state of Tamil Nadu is a crucial market for Zepto, according to Divesh Sawhney, Chief Growth Officer.
In addition to enabling sellers to serve customers more quickly, service expansion opens up new business prospects for nearby companies. He went on to say that the company is dedicated to strengthening our ties with the community while delivering speed, quality, and affordability to every home.
Setting up Another Bench Mark
Zepto Cafe, the company’s fast food delivery division, has exceeded one lakh orders daily. Aadit Palicha, the CEO and co-founder of Zepto, shared the accomplishment on social media, emphasising the Zepto Cafe’s expansion in the quick-service food (QSR) sector. In a post on X, Palicha claimed that Zepto Cafe currently receives 100,000 orders every day. Every day, Zepto Cafe receives 100,000 orders.
That’s getting close to a steady-state gross margin of 50% and an annualised GMV run rate of $100M. “We still have a long way to go, but I think the QSR sector in India is about to undergo a revolution,” he posted. According to an article in a renowned media outlet, Zepto Cafe has been growing rapidly, launching 100 new locations each month. Zepto reported operating revenue of INR 4,454 crore in fiscal year 2024 (FY24), a 120% increase over FY23.
Rapid Commerce Race is Getting More Intense
The rapid commerce industry has evolved into a high-cash-burn sector, with companies allocating billions towards expansion and client acquisition. Industry estimates indicate that the aggregate monthly cash burn of rapid commerce entities, including new entrants, ranges between INR 1,300 and 1,500 crore—more than double in recent months.
Despite nearing operational breakeven in Q2 FY25, Blinkit’s losses escalated in Q3 FY25, with operating losses rising to INR 103 crore from INR 8 crore in the preceding quarter. Swiggy reported a net loss of INR 799 crore, while Instamart had an adjusted EBITDA loss of INR 578 crore in Q3, compared to INR 358 crore in Q2.
Zomato’s ability to continue investing in Blinkit stems from its financial stability. In November 2024, Zomato secured INR 8,500 crore in a qualified institutional placement (QIP) to enhance its balance sheet and finance its rapid commerce operations. As of December 31, 2024, Zomato possessed cash reserves amounting to INR 19,235 crore, providing adequate liquidity to support Blinkit’s expansion.
