Story of Zepto: How Is It Delivering Groceries in Ten Minutes?

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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 5000+ products and get them delivered to their doorstep with the help of Zepto's 10-minute e-grocery delivery app.

Learn more about Zepto, India's first unicorn startup in 2023, its founders, funding and investors, business and revenue model, startup story, growth, challenges, and more.

Zepto - Company Highlights

About Zepto
Zepto - Industry
Zepto - Founders and Team
Zepto - Startup Story
Zepto - Mission and Vision
Zepto - Name, Logo, and Tagline
Zepto - Business and Revenue Model
Zepto - Funding and Investors
Zepto - Growth and Revenue
Zepto - Challenges
Zepto - Advertisements and Social Media Campaigns
Zepto - Competitors
Zepto - Future Plans

About Zepto

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 5000+ 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 - 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.

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Zepto - Founders and Team

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.

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Zepto - Startup Story

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.

Zepto - Mission and Vision

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

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.

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Zepto - Funding and Investors

Zepto, the Mumbai-based quick commerce unicorn, raised $340 million in Series G funding on August 30, 2024. This raises Zepto's valuation to $5 billion as of August 2024. This new investment comes shortly after the $665 million raised in June 2024, which valued the company at $3.6 billion. With this latest round, Zepto has raised a total of $1.6 billion in funding over nine rounds to date.

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. The startup's initial seed funding in September 2020 was led by Contrary.

In August 2023, Zepto achieved unicorn status by 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. Zepto's rise as the first Indian unicorn in 2023 underscored its remarkable growth and potential in the quick commerce industry, even amidst a challenging market.

Zepto Ownership

Among the shareholders, Nexus Ventures holds the largest stake, holding 20.9% of Zepto. Other prominent owners of Zepto include Y Combinator, Lacy Groom, Glade Brook, and co-founders Aadit Palicha and Kaivalya Vohra, among others.

Zepto - Growth and Revenue

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 200 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

In its initial operational year of FY22, Zepto achieved a total revenue of INR 142.3 crore. However, the startup also experienced losses amounting to INR 390.3 crore during the same fiscal year. With operations commencing in April 2021, Zepto's overall expenses added up to INR 532.7 crore in FY22.

Zepto's net loss increased 3.35 times in the fiscal year that concluded on March 31, 2023. In the fiscal year 2022–2023 (FY23), the fast-commerce company recorded a net loss of INR 1,272.4 crore, a 226% rise over the previous fiscal year FY22 INR 390.3 crore.

Operational revenue increased 14.3X from INR 142.3 crore in FY22 to INR 2,024.3 crore in FY23.

Expenses

The year under consideration had a 529% increase in total expenses. The company incurred costs of INR 3,350 crore in FY23, a 6.3X rise from INR 532.7 crore in FY22.

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Zepto - Challenges

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 - 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.

Zepto - Competitors

Many businesses compete with Zepto and have already been driving fast-paced delivery of groceries like:

• Swiggy Instamart
• Big Basket
• Blinkit

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 is targeting profitability by 2024, and to achieve this, Zepto has ambitious plans to multiply its dark stores and expand its delivery network. The ultimate goal is to become a publicly listed company, with an IPO targeted within the next two to three years. With a strategic focus on sustained growth and elevated key executives, Zepto is well-positioned to solidify its position as a prominent player in the quick-commerce industry.

In the upcoming months, Zepto, which was named the first unicorn of 2023, plans to surpass INR 10,000 crore in total sales as per various news reports of October 9, 2023, according to founders and CEO Aadit Palicha, who was speaking on a panel at the The Economic Times Startup Awards (ETSA).

FAQs

What is Zepto?

Zepto is a startup based in Mumbai that offers a 10-minute grocery delivery service.

Who founded Zepto?

Zepto was founded by Aadit Palicha and Kaivalya Vohra, two childhood friends.

When was Zepto founded?

Zepto was founded in September 2020 and began operations in April 2021.

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.