Zepto, a quick commerce company, recently has seen its monthly cash burn jump to over Rs 250 crore (around $30 million) due to increasing competition in the market. This increase has risen almost six times from the past three months which was ranging between Rs. 35-40 crores.
Funds raised by Zepto
In response to this financial strain, Zepto successfully raised Rs 2,500 crore (about $300 million) from wealthy Investors in India. This funding aims to help the company strengthen its position and compete more effectively against rivals blinkit, big basket and instamart, while striving to capture a larger share of the market.
Zepto’s rapid growth and expansion have build the trust of investors in it and that is the reason why it has already raised over a billion dollars this year and has just closed a fresh primary round of $300 million (Rs 2,500 crore). Following the funding, Indian shareholding in Zepto will rise to around 35%, including stakes held by its founders by 1%.
In an interview with money control CEO and co-founder of Zepto Aadit Palicha told, “Investors are confident with the mature store profitability proven and the forward indicators of EBITDA for new stores, which is why we have successfully raised the largest ever 100 percent domestic financing for a private startup in Indian history. We are raising this Indian capital as a first step to quickly becoming a fully Indian-owned company within the coming fiscal,“.
In September, the company burned around Rs. 250 crore (about $30 million), and in October, that amount rose to Rs. 300 crore (around $35 million). It is expected to stay around Rs 300 crore in November.
Aadit Palicha said, “70 percent of our existing stores have hit full EBITDA (Earnings Before Interest, Depreciation, Taxes, and Amortization)profitability. The capital we are burning is primarily for the capex, working capital, and ops set up to launch 100s of new stores per quarter. Although the investment is upfront, these stores have a better EBITDA trajectory than the older stores – giving us the conviction to invest in launching new stores, which is delivering 200%+ y-o-y growth on a base of 10s of thousands of crores of scale,”.
First Unicorn start-up of 2023
Launched in 2021, by Aadit Palicha and Kaivalya Vohraas a daily needs and grocery delivery app Zepto, stands out from another grocery delivery apps by promising to deliver the groceries within 10 minutes.
Zepto soon in 2023 became the first unicorn start-up of India. The company’s revenue has grown over five-fold to over Rs 10,000 crore in FY24 from about Rs 2,000 crore in FY23.Zeptopays a heavy amount on advertising and digital marketing.
With a market cash balance of $1.4B, Zepto has a marketshare of 29% (March 2022), While blinkit leads in the market with 40% share. over it’s 250 dark stores in 10 metropolitan areas of India. The company is expected to double this number to over 700 by March 2025.
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