Zepto - How is it Delivering Groceries In Ten-Minutes?

Sarika Anand Sarika Anand Anik Banerjee Anik Banerjee
Jun 4, 2022 13 min read
Zepto - How is it Delivering Groceries In Ten-Minutes?

Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Zepto.

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 groceries delivery business. Weezy, Gorillas, Jokr, Swiggy Instamart, Grofers, 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 is not another grocery delivery app but a platform that promises 10-minute deliveries of groceries, built in order to revolutionise the selling and deliveries of groceries. With Zepto by their side, the customers can conveniently purchase from 2500+ products and get them delivered to their doorstep with the help of Zepto's 10-minute e-grocery delivery app.

Know more about Zepto, a grocery store that delivers, its Funding and Investors, Business model, Revenue model, Startup story, Founders and Team, Logo, Growth, Challenges, Competitors and more, in this article.

Zepto - Company Highlights

Startup Name Zepto
Legal Name KiranaKart Technologies Private Limited
Headquarters Parel, Maharashtra, India
Industry Delivery, Delivery Service, and Grocery
Founders Aadit Palicha, and Kaivalya Vohra
Founded 2021
Total Funding $360 mn (May 2022)
Valuation $900 mn (May 2022)
Areas Served India
Current CEO Aadit Palicha
Website www.zeptonow.com

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

About Zepto

Zepto, a startup based in Mumbai, offers a 10-minute groceries delivery service. Aadit Palicha and Kaivalya Vohra launched Zepto, a company known to deliver groceries in 10 minutes.

Specialising in delivering groceries before the turn of a year is what Zepto is hailed for. It has worked with 86+ dark store owners in thirteen different areas in 2021, generating over one million deliveries. To fulfil orders promptly, Zepto employs its network of 'cloud shops' or micro-warehouses.

Zepto's secret of the trade lies in its capacity to routinely produce 2,500+ goods for delivery in under ten minutes. It's at the heart of everything the firm does, and it's why they've been able to grow so quickly while maintaining incredible client loyalty.

With the dark store idea, the Parel-based rapid grocery delivery business has slashed the time it takes to deliver groceries to only 10 minutes. According to reports, rapid commerce is the next major thing the supermarket delivery sector is hoping to capitalize on. Startups like Zepto in India and Fridge No More in New York City are among the fastest-growing companies in the faster-delivery business.

Zepto - Industry

E-grocery delivery is gathering traction in India with a $1 trillion retail market where grocery purchases make up the vast majority of consumer spending. The Indian e-grocery market was valued at $2.9 billion in 2020, and it is expected to grow at a rate of 37.1% from 2021 to 2028.

The sector has expanded in prevalence in the past months as a result of evolving customer habits, growing urbanisation, and a tech-savvy generation who prefers to make online purchases.

A RedSeer report mentioned that the quick commerce segment was valued at $30 mn in 2021. The same segment was predicted to become a $5 bn market in 2025, growing by 15X.

As their standard of living increase and their daily schedules get tighter, consumers are flocking to customised 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, created Zepto after walking out of Stanford University's renowned computer science department to return to their home, India, and start up a business. The firm was founded in September of last year and began operations in April of this year.

Founders of Zepto - Aadit Palicha and Kaivalya Vohra
Founders of Zepto - Aadit Palicha and Kaivalya Vohra

Aadit Palicha

Aadit Palicha is the CEO and Co-Founder of both KiranaKart and Zepto. After completing an IB diploma from GEMS Education in Mathematics and Computer Science, Palicha finished a Bachelor's degree in Computer Science from Stanford University. 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. Β  Β 

Kaivalya Vohra

Kaivalya Vohra is the Co-Founder and CTO of KiranaKart and the Co-Founder and CTO of Zepto. He is also a Stanford University graduate in Computer Science, and went in Y Combinator as well, along with Aadit.

Zepto has an employee strength ranging between 51 and 200 employees.

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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.

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, like 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 at a cost of Rs 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 Logo
Zepto Logo

Zepto's tagline says, "Groceries delivered in 10 minutes."

Zepto - Business Model, 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 centres, the Mumbai-based company employs a hotspot method to cater largely to digital purchases.

A dark store is a tiny neighbourhood 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, Β traffic dynamics, topography, road patterns, weather conditions, last-mile operational improvement, real estate prices, and other geographic data and local intelligence are aids Zepto in optimising 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 Marketing

Zepto marketing is one of the best that recent companies have seen in India, which contributes significantly to the growth that Zepto witnessed within such a short span of time. L&K Saatchi & Saatchi was behind 3 of Zepto's recent ads that promoted its products and services.

Zepto has rolled out new campaigns featuring celebrated singers like Kailash Kher, Shankar Mahadevan & Usha Uthup together to promote the company during the IPL season of 2022, and both are unique and melodic for the audiences.

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Zepto - Funding, and Investors

Zepto raised $360+ mn in total in funding over 4 rounds to date. The last funding round (Series D) was raised by Zepto on May 2, 2022, which helped the company raise $200 mn. With this, Zepto has neared the unicorn valuation. The startup is currently valued at $900 million, as of May 3, 2022. The Zepto seed funding was led by Contrary in September 2020.

Date Round Amount Lead investors
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 A $60 million Glade Brook Capital Partners
Sep 1, 2020 Pre Seed Round - Contrary

Zepto Shareholding

There was a fresh allotment of shares after Zepto has raised its Series D round, which is why we will be looking at the Zepto ownership.

Among the shareholders, Nexus Ventures holds the largest stakes, holding 20.07% stakes of Zepto, after which comes Y Combinator, Lachy Groom and Glade Brook, which hold 14.8%, 10.32%, and 8.7% of the Zepto stakes respectively. Zepto Co-founder and CEO Aadit Palicha hold 15.18% stakes along with his relative Kavit Palicha, and Kaivalya Vohra, along with his relative Jaideep Vohra holds 12.64% stakes.

Zepto Shareholders
Zepto Shareholders

Zepto - Growth

Zepto is growing in Bengaluru, Mumbai, and Delhi-NCR, with Hyderabad, Chennai, Pune, and Kolkata to follow in the coming months. Its technical office is in Bengaluru, while its operations are in Mumbai. Dream11, Flipkart, Pharmeasy, Uber and Pepperfry have all hired key executives for Zepto.

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%.

β€œWe are looking at a pretty crazy runrate,” he said. β€œIn 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.

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 an 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 in previous months. Plenty of well-known senior executives from Uber, Flipkart, Dream11, Β 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.

β€œThey 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 Palicha.

Zepto has witnessed an 800% q-o-q revenue growth, and its burn has come down by 5X on a per-order basis. Zepto's 10-minute delivery strategy can now inventory and delivery 3000+ goods. The startup's annualised revenue growth was noted as between $200-400 million when last reported on May 2, 2022. This figure is expected to grow to at least $1 bn by the quarter of March next year. In recent months, Zepto has claimed to grow by 50% each month, and this growth is attributed to the growth that Zepto boasts of. Furthermore, in the most recent quarter, Zepto has claimed to have grown by 800% along with slashing its expenditure by more than 5X. Β 

Zepto - Challenges

Zepto has encountered some challenges lately, and in one of the recent ones, there were instances of a 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 cofounders has been named in an FIR. YoloBus and Acko were two other companies that dealt with the same before. Β  Β  Β 

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Zepto - Competitors

There are many businesses that compete with Zepto and have already been driving fast-paced delivery of groceries like:

Both Swiggy and Big Basket have already begun delivering groceries between 10-15 minutes and Blinkit is all set to begin 10-minute grocery deliveries in 10 cities, which are all competing with Zepto. Dunzo is another startup, which uses its Xpress Mart dark shop network to deliver groceries in Bengaluru in 19 minutes, and competes with Zepto.

Zepto - Future Plans

The cash will be used by the Mumbai-based firm to increase the number of dark stores in additional locations, grow its client base, and hire more workforce. It is now available in Bengaluru and the Delhi-National Capital Region, with Hyderabad, Chennai, Pune, and Kolkata to follow in the following 30 days.

By the end of the year, it hopes to have 100 dark businesses open, serving roughly 100 pin codes. Quick commerce is predicted to reach $300 million by the end of this year, according to a research group, and will expand to $5 billion by 2025.

The Co-founder Palicha explained that no one has completely mastered marketing in India. He further said that when you examine a few older organisations that are attempting to implement this approach, you'll notice that many of them are unfocused and lack the consistency to operate on a single model. They get involved in several different things, which is the greatest issue in every major firm.

β€œWe have seen our median delivery times stabilise if not decrease, mainly because as we scale our coverage and our expansion, it ends up being a factor of individual cloud stores and how they perform,” he said.

Express delivery is not a novel notion; most existing e-grocers have attempted it previously, with mixed results. Following the Covid-19 pandemic's faster uptake of online groceries, these platforms have been bringing back speedy delivery to consumers, primarily under the dark-store model.


What does Zepto do?

Zepto, a startup based in Mumbai, 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 do Zepto compete with?

Swiggy Instamart and BigBasket, which deliver in fifteen-thirty minutes, compete with Zepto, as does Blinkit, which aims to provide 10-minute food deliveries in ten cities in India. It also competes with Dunzo, which uses its Xpress Mart dark shop network to deliver groceries in Bengaluru in 19 minutes.

How many dark stores Zepto works with?

Zepto has worked with over 86 dark stores in 2021 itself.

What is Zepto ownership?

Digging into the latest Zepto ownership, it can be found that Nexus Venture Partners is the highest shareholder of the company with a 20.07% of stake in the company. Some other shareholders of the company are:

  • Y Combinator - 14.80%
  • Kavit Palicha - 13.66%
  • Jaideep Vohra - 11.38%
  • Lachy Groom - 10.32%
  • Glade Groups - 8.70%
  • Rocket Internet - 5.20%
  • Others - 4.18%
  • Oliver Jung - 3.55%
  • Contrary Capital - 2.53%
  • Kaiser Foundation - 1.53%
  • Aadit Palicha - 1.52%
  • Kaivalya Vohra - 1.26%
  • Global Founder Capital - 1.20%

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