Zepto Secures ₹350 Million to Revolutionize Quick Commerce and Eye 2025 IPO

Zepto, the fast-growing quick commerce platform, has raised a massive $350 million (approximately ₹2,900 crore) from prominent domestic investors, setting the stage for the company's next phase of growth. Co-founder and CEO Aadit Palicha expressed confidence in Zepto's future, stating that the company is on a clear path to becoming a fully Indian-owned entity and achieving profitability (PAT positive) by next year. With a potential IPO on the horizon in 2025, Zepto’s growth trajectory continues to impress both investors and consumers alike.

Zepto's Vision for a Full Indian Ownership

In an exclusive interview with PTI, Palicha revealed that Zepto is in the process of transitioning its domicile from Singapore to India, with plans to become a completely Indian-owned company by FY26. This move underscores Zepto's commitment to strengthening its ties with the Indian market and maximizing domestic ownership, as it works toward its ambitious IPO in 2025.

“We are confident that we will be a domestic company within the next financial year,” said Palicha. "Our objective is clear, and we're well on track." The company is also looking to expand its operations significantly, aiming to reach over 50 cities by next quarter, further solidifying its dominance in the growing quick commerce sector.

Zepto’s rapid success has attracted both admiration and criticism, particularly regarding its impact on traditional kirana stores. Palicha strongly countered claims that quick commerce disrupts the growth of local businesses, emphasizing that the data does not support such narratives. According to him, the rise of quick commerce has created significant job opportunities, with over 4.5 lakh jobs generated in just three years. He highlighted that wages in the sector average Rs 20,000, a substantial increase over informal sector jobs.

“Quick commerce is a net positive,” Palicha stated. “We’re not only creating value for consumers but also for the workers who are an integral part of this ecosystem.” He also refuted allegations of predatory pricing, asserting that 99.8% of the products sold on Zepto are priced above cost, reinforcing the company's commitment to fair pricing practices.

The Zepto Business Model and Industry Growth

Zepto has revolutionized the quick commerce model by offering ultra-fast, 10-minute delivery of groceries and daily essentials, a service that has become a hallmark of Indian technology. "No other country can deliver essentials at this scale within 10 minutes," said Palicha, praising the capabilities of Indian technology and infrastructure.

The company's recent fundraise, led by Motilal Oswal's Private Wealth division, will be used to enhance its domestic operations and bring more products to consumers across the nation. With Zepto continuing to scale rapidly, the company is on track to hit a billion-dollar top-line by April-May 2024, and is aiming for significant milestones in the coming months.

Expanding Zepto’s Footprint and Future Prospects

Zepto is already growing at an exceptional pace, with plans to expand its presence to more than 50 cities in the near future. The company’s expansion strategy is not limited to geography; Zepto has also seen incredible success with its Zepto Cafe, which is rapidly gaining popularity. "Zepto Cafe is proving to be margin additive and is driving customer retention," Palicha noted. The company expects to reach Rs 1,000 crore in business from Zepto Cafe alone.

Despite facing stiff competition from players like Blinkit and Swiggy Instamart, Palicha views the market as large enough for all players to thrive. "Competition is a good thing. The market is genuinely quite large, and we’re focused on executing our own strategy," he said. Zepto’s success story is a testament to the booming quick commerce sector, which continues to transform how consumers shop and how businesses scale in the digital age.

A Bright Future Ahead: Zepto's Path to Profitability

Zepto’s future looks even brighter with the company's path to profitability on track for next year. Palicha confidently predicts that Zepto will be PAT positive by the next financial year, sending a positive signal to potential investors and stakeholders. With a robust business model, rapid expansion, and an unwavering focus on customer experience, Zepto is poised to become one of India’s most prominent consumer-facing companies in the years to come.