Zepto, a grocery startup, announced that it has raised $200 million (roughly Rs. 1,530 crore) in new funding, valuing the company at $900 million (roughly Rs. 6,900 crore), indicating growing investor interest in a market where companies are luring customers with quick 10-minute deliveries.
Last year, two 19-year-old Stanford dropouts founded Zepto. Its most recent fundraising round was led by current investor Y Combinator, a well-known Silicon Valley venture capital firm.
According to a statement released by Zepto, it included involvement from a new investor, Kaiser Permanente, as well as all of the company’s previous investors, including Nexus Venture Partners.
According to Aadit Palicha, co-founder and CEO of Zepto, the company currently operates in 11 cities and expects to grow to as many as 24 more cities within the next quarter with the new financing.
“The scale that took food delivery companies years to achieve has taken us months (with groceries). That’s the benchmark most people use and the market size for groceries is far bigger,” in an interview, Palicha remarked.
Foreign investors are flocking to the country’s tech firms, hoping to profit on the expanding usage of digital payments, the Internet, and smartphones in the region.
According to RedSeer, India’s ‘fast commerce’ sector, which was worth $300 million (approximately Rs. 2,300 crore) last year, would grow 10-15 times to $5 billion (about Rs. 38,300 crore) by 2025. The whole grocery retailing industry in India is far larger, with a market value of almost $600 billion (roughly Rs. 45,98,700 crore).
While the company is flourishing, Reuters reported in January that speedy delivery services in India had created road safety issues for delivery motorcycles, citing India’s high accident rate.
Blinkit and Zepto drivers previously told Reuters that they were under pressure to make delivery dates, which often led to speeding in order to avoid being reprimanded by store managers.
Palicha defended Zepto’s practices, claiming that drivers only travel 1.8 kilometers on average to deliver orders and do not hustle.
According to Reuters, Zepto generates an average monthly revenue of $12 million (approximately Rs. 90 crore), but spends about $8 million (about Rs. 60 crore) per month on marketing, advertising, and other activities such as free deliveries.
“We burn less (cash) than our competitors,” Palicha remarked.
“This model has been demonstrated all around the world. Companies have showed operating profits in Turkey and Russia,” he continued.
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News Source: todaynewsnetwork