Zepto, one of India’s emerging quick food delivery startups has raised the sum of $200 million in a Series D funding round, drawing unusually high interest from venture capital firms.
According to a TechCrunch report, Y Combinator, one of the startup’s existing investors led the Zepto round as the company is now valued at $900 million. Other investors who took part in the funding round include notable existing investors including Nexus Venture Partners, Glade Brook Capital, Contrary Capital, and Lachy Groom. The continued support from these backers has helped the startup grow its valuation to its current level from $225 million back in late October last year. The valuation also pushed up from the $570 million valuations recorded when it conducted its Series C funding round in December last year.
Zepto is amongst the pioneers for fast or 10-minute grocery delivery, an industry that is currently being dominated by Swiggy, India’s most valuable food delivery firm which has pledged to invest as much as $700 million into enhancing its services in the next few years. Zepto, founded by Aadit Palicha and Kaivalya Vohra as teenagers, has so-called dark stores which serve as storage for the most in-demand consumer goods which are swiftly deployed based on the order.
With the new funding, Zepto has a number of growth projections and roadmaps it hopes to walk through in the next couple of years. At present, Zepto’s 10-minute delivery service is fully operational in 11 cities across India.
According to Palicha who is the company’s CEO, Zepto takes and processes hundreds of thousands of orders on a daily basis. The startup notably rakes in revenue of $200 million to $400 million on an annual basis with the target to take this figure to $1 billion by the quarter billed to end in the March 2023 quarter.
Zepto in India’s Competitive Quick Delivery Ecosystem
Keeping up pace with the 10-minute delivery promise in India’s quick groceries delivery ecosystem is not an event that comes easy for many companies eying the space as gleaned from the struggles of food delivery giant Zomato. The competition is fierce and a lot of players in the space are jostling to get a bigger share of the market.
According to analysts at Sanford C. Bernstein, the market is worth $45 billion, also noting that customers are willing to pay for fast food deliveries, and India is leading many economies in its adoption of this offshoot of e-commerce.
While the average size of quick delivery orders is pegged at $6 against the $12 to $15 for traditional online grocery orders, the Bernstein analysts believe “recent cohorts have shown improving stickiness, with basket size increasing with increase in usage. Quick commerce models have seen improving monthly order frequency (mature cohorts at 3-4 times a week, with healthy AOV of 400-500 Indian rupees). Quick commerce players are focused on driving a high frequency basket which will drive better economics,” they added.
Zepto is a part of the ecosystem, and it hopes to shift its focus to other underserved aspects of the ecommerce world in the near future. This move aligns in part with what Bolt is trying to do for which it has secured over $710 million in funding to achieve.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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