Zepto, the quick-commerce unicorn revolutionizing 10-minute deliveries in India, has reported a remarkable 120% jump in its revenue for FY24, reaching ₹4,455 crore. This significant growth underscores the rising preference of customers for quick deliveries over traditional e-commerce platforms and kirana stores. Despite increased operational costs, Zepto managed to reduce its losses marginally by 2%, signaling a strong trajectory toward profitability.
Revenue Boom Outpaces Competitors
Zepto has cemented its leadership in the quick commerce segment with a revenue far ahead of its competitors. In FY24:
– Zepto: ₹4,455 crore
– Blinkit (market leader): ₹2,301 crore
– Swiggy Instamart: ₹1,100 crore
Zepto’s dominance in revenue terms highlights its ability to capture a growing customer base transitioning to faster delivery options. CEO and co-founder Aadit Palicha emphasized the company’s robust growth on LinkedIn, stating, “Our accounting revenue has grown 120% year-on-year… Even with 120% growth, our absolute losses came down year-on-year with PAT as a percentage of revenue improving from -63% in FY23 to -28% in FY24.”
Rising Costs and Controlled Losses
Zepto’s phenomenal growth has come at a price. The company’s total expenses surged by 72% to ₹5,747 crore in FY24, up from ₹3,350 crore in FY23. This sharp increase is attributed to high marketing expenses, the cost of materials, and investments in logistics and operations to support its aggressive expansion.
Despite these expenses, Zepto managed to reduce its losses marginally from ₹1,272 crore in FY23 to ₹1,249 crore in FY24. The improvement in PAT (profit after tax) as a percentage of revenue—from -63% in FY23 to -28% in FY24—signals better financial discipline and operational efficiencies.
Business Model and Operations
Zepto operates through Kiranakart Technologies Pvt Ltd, its Indian entity responsible for:
– Licensing the Zepto brand.
– Trading consumer goods.
– Providing logistics services.
– Running advertisements on the Zepto app.
Kiranakart acts as a B2B (business-to-business) platform, supplying goods to various entities operating under the Zepto umbrella. This integrated structure enables Zepto to scale operations rapidly while maintaining centralized control over the supply chain.
Funding and Expansion
Zepto has raised an astounding ₹11,475 crore ($1.35 billion) in back-to-back funding rounds over just five months, bolstering its financial position. As of FY24, the company reported a cash and bank balance of ₹692 crore, but the recent funding injections have significantly strengthened its balance sheet.
This capital influx is essential to sustain Zepto’s monthly cash burn rate of ₹250–₹300 crore, which translates to roughly ₹10 crore per day. The funding supports:
– Expansion of operations.
– Setting up new dark stores to enhance delivery speed.
– Positioning the company for future growth amid rising competition.
IPO Plans and Domestic Base Flip
Zepto is gearing up for an ambitious $500 million Initial Public Offering (IPO) in 2025. To align with its public market aspirations, the company is preparing to shift its base from Singapore to India. It has already appointed Goldman Sachs, Morgan Stanley, and Axis Capital to lead the IPO process.
This move reflects Zepto’s commitment to strengthening its domestic presence and tapping into the growing Indian stock market.
Zepto operates in a fiercely competitive quick commerce market, vying against:
– Blinkit (market leader).
– Swiggy Instamart.
– Established players like Flipkart Minutes and Tata BigBasket.
– Potential entrants like Amazon.
While Blinkit holds a dominant position in terms of market share, Zepto’s higher revenue highlights its capability to outpace competitors in value terms. However, sustaining this momentum requires balancing rapid growth with cost management.
Zepto’s focus remains on operational efficiency, market expansion, and transitioning toward profitability. The company’s leadership is confident about achieving PAT profitability soon, driven by improved revenue and disciplined cost control.
Additionally, its plans to go public and increase its domestic footprint could unlock new growth opportunities while reducing reliance on external funding.
Zepto’s FY24 performance showcases its potential to transform India’s quick commerce sector. With a revenue of ₹4,455 crore, reduced losses, and strong investor backing, the company is well-positioned for sustained growth.
As it navigates challenges from competitors and prepares for a landmark IPO, Zepto’s aggressive expansion strategy and customer-centric model make it a frontrunner in shaping the future of quick commerce in India.
