Indian quick-commerce startup Zept has crossed the $1 billion annual revenue milestone just 29 months after it was founded, Goldman Sachs wrote in a note Thursday, citing Zept management.
The startup, which competes with Zomato-owned Blinkit and SoftBank-backed Swiggy Instamart, has also gained market share and is now in a position “close to the second-largest player,” the report added. His Zepto, which became a unicorn last year, counts YC Continuity, StepStone Group, Glade Brook Capital, and Lachy Groom among its backers.
Zepto operates across seven cities in India and leverages a network of over 300 dark stores, or micro-fulfillment centers, to offer customers delivery of goods across categories, including groceries and electronics. doing. The startup, which promises to deliver goods to customers within 10 minutes of ordering, currently processes about 550,000 orders each day, executives told investment banks.
And the startup's financial situation is rapidly improving. “Zepto's overall EBITDA margin is a negative single-digit percentage and the company is on track to reach breakeven at the EBITDA level during the next quarter. The company has a steady-state contribution margin of 12% , we expect steady-state EBITDA margin to be 7%,” the report added. “According to Zepto, newly opened dark stores are now profitable within nine months (previously he was 15-18 months ago) with a throughput of 1,500 orders per day per store.”
Instant commerce companies are expanding in India, not only competing with traditional supermarkets and neighborhood stores, but also increasingly challenging e-commerce giants such as Flipkart and Amazon.
India's quick commerce sector, which didn't exist just three years ago, has soared past the $5 billion mark, captured more than half of the online grocery market, and is dominated by prominent Indian supermarket chain Dmart. Achieved comparable scale. said the bank.
“Zepto believes its quick commerce platform is well positioned against kiranas (traditional grocery retailers) due to sourcing advantages that lead to better pricing. 5x). Quality control; Delivery time (delivery possible within 15 minutes). Zepto believes it can expand to 40-50 cities over time,” the report added.