Quick commerce startup Zepto, which commenced operations in 2021 became the first Unicorn in 2023. Now, they have raised INR 5,554 Cr (USD 665 Mn) at a valuation of USD 3.6 Bn, that is INR 30,000 Crores!
The company plans to double its store count to 700 to take on the other two major players Blinkit by Zomato and Instamart by Swiggy.
DST Global, Lightspeed Venture Partners, Avenir Growth Capital and Avra join existing investors Glade Brook Capital, Stepstone Group and Nexus Venture Partners. Existing partners are said to have funded over INR 3,500 Cr (USD 429 Mn) in this round.
Zepto was founded by 22 year-olds Aadit Palicha and Kaivalya Vohra, after the second wave of Covid-19 stuck India in Jan. ‘22, when consumers were weary of visiting nearby kirana shops and supermarkets.
The company will enter 10 new markets including Ahmedabad, Chandigarh, Jaipur among others, while increasing its employee strength from 1,600 to 2,000.
Q-Commerce companies operate on a concept of Dark Stores, i.e., they only service deliveries from such stores and do not sell anything directly to consumers.
While Swiggy Instamart and Zomato’s Blinkit have around 500 such stores each, Reliance Retail operates over 2,700 “Fresh” stores across India that sell grocery and household items and many have either been converted in to a delivery point or have been made in to a dark store.
Zepto’s annualised revenues is to the tune of INR 12,000 Cr (USD 1.4 Bn) while Reliance Retail’s Food and Grocery arm “Fresh” has an annual turnover of INR 50,000 Cr (USD 6.5 bn).
Zepto plans to increase the size of its dark stores to 4,000 sq ft from its current size of 3,500 sq ft but plans to increase the SKUs it currently serves from 3,000 to 10,000.
These would include non-grocery categories such as electronics, household appliances, toys, beauty, personal care, etc.
Contrary to popular belief, the key competition for Zepto will not be Blinkit or Instamart, rather the eponymous Reliance Retail division with a total turnover of INR 1 lakh Crores through multiple verticals such as Trends (apparel), Fresh (grocery) and Digital (electronics) among others.
Reliance is getting ready with its Jio Mart e-commerce operations to offer delivery within 10 mins, made possible through its network of 18,500+ stores across India spanning various categories.
The recent funding for Q-commerce companies, including Flipkart which recently raised USD 1 Bn for its Q-commerce venture is a short in the arm for mid-sized offline retailers who sell grocery and household items in the neighbourhood.
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