Indian quick-commerce startup Zepto has surpassed the annualised sales milestone of $1 billion within 29 months of its inception, Goldman Sachs wrote in a note Thursday, citing Zepto management.
Zepto, which competes with Zomato-owned Blinkit and SoftBank-backed Swiggy Instamart, is also gaining market share, now standing “close to that of the number 2 player,” the report added. Zepto, which became a unicorn last year, counts YC Continuity, StepStone Group, Glade Brook Capital and Contrary among its backers.
BlinkIt, acquired by Zomato for $568 million in 2022, commands the tentpole position in the instant-commerce market. Zomato co-founder Deepinder Goyal said at a recent conference that he believes BlinkIt will become larger than its food delivery owner in a year.
Zepto, founded by two college dropout teens, operates in seven Indian cities and uses a network of over 300 dark stores, or microfulfillment centers, to offer customers delivery of items from a range of categories including grocery and electronics. The startup, which promises to deliver items to customers within 10 minutes of placing an order, currently processes approximately 550,000 orders daily, its management told the investment bank.
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And the startup is quickly improving its finances, too. “Overall EBITDA margin for Zepto is at negative single-digit percentage and the company is on track to break even at the EBITDA level within the next quarter. The company expects steady state contribution margin of 12%, with steady state EBITDA margin of 7%,” the report added. “Per Zepto, newly opened dark stores are turning profitable in 9 months now (vs 15-18 months earlier), at a throughput per store of 1,500 orders per day.”
Instant-commerce companies are making inroads in India, not only competing with traditional supermarkets and neighborhood stores but also increasingly posing challenge to e-commerce giants such as Flipkart and Amazon.
India’s quick-commerce sector, something that didn’t exist just three years ago, has surged past the $5 billion mark, capturing over half of the online grocery market and achieving a scale on par with that of prominent Indian supermarket chain Dmart, the investment bank said.
“Zepto believes quick-commerce platforms are well positioned versus other formats of organised grocery in the offline and online domains because of a proximity advantage to customers while maintaining the price, assortment, and quality benefits of organised grocery,” the report added.
Quick commerce is making fast inroads in India
