New Delhi: Quick commerce startup Zepto is racing towards an IPO in 2025, fueled by a recent $350 million funding round that puts it on track for full Indian ownership and profitability. CEO Aadit Palicha, in an exclusive interview with PTI, outlined the company’s ambitious goals, dismissing concerns about the quick commerce model’s impact on traditional businesses and emphasizing its positive contributions to the Indian economy.
Indian Ownership and Profitability on the Horizon
Zepto’s latest funding round, led by Motilal Oswal’s Private Wealth division, saw participation from prominent Indian investors, aligning with the company’s goal of becoming fully Indian-owned by FY26. This move precedes a planned IPO in 2025, signaling Zepto’s confidence in its growth trajectory and financial stability. Palicha confirmed that the company is nearing completion of its domicile shift from Singapore to India, further solidifying its commitment to the domestic market.
The company is also laser-focused on profitability. Palicha revealed that Zepto is on track to achieve positive PAT (Profit After Tax) in the next financial year, a significant milestone for the rapidly growing startup. This financial health is driven by increased efficiency, with stores now turning profitable in just 8 months, compared to 23 months previously.
Dispelling Myths and Addressing Concerns
Palicha addressed criticisms surrounding the quick commerce model, refuting claims that it disrupts traditional kirana stores. He argued that the industry has created “net positives,” generating lakhs of jobs and boosting the economy. Zepto’s 10-minute delivery model, he asserted, has not only provided value to consumers but also improved wages and working conditions for delivery partners.
Furthermore, Palicha countered allegations of predatory pricing with data, stating that 99.8% of products on the platform are sold above cost. He invited skeptics to examine the company’s financial records, emphasizing transparency and data-driven decision-making.
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On food quality and safety, Palicha acknowledged the industry’s challenges and welcomed scrutiny. He emphasized Zepto’s commitment to consumer welfare and its collaborative approach with regulatory bodies like the FSSAI.
Growth and Expansion
Zepto’s growth remains robust, with plans to expand its footprint to over 50 cities by the next quarter. The company has already achieved significant scale, hitting $1 billion in revenue in April-May 2024 and is poised to reach new milestones soon. Palicha highlighted the unique achievement of scaling the quick commerce model for groceries and daily essentials in India, a feat unmatched globally.
Zepto Cafe, a new segment offering ready-to-eat meals and beverages, is also showing strong performance. Palicha expects this segment to reach Rs 1,000 crore in revenue, contributing to increased customer frequency and retention.
Competition and the Future
Despite competition from players like Blinkit and Swiggy Instamart, Palicha expressed confidence in the market’s potential. He believes there is ample room for multiple players and emphasized Zepto’s focus on its own execution and customer satisfaction.
With a clear vision for the future, Zepto is poised to become a major player in the Indian retail landscape. Its commitment to Indian ownership, profitability, and customer-centricity, combined with its rapid growth and innovative approach, sets the stage for a successful IPO and continued expansion in the years to come.