Zepto, a 10-minute grocery delivery app in India, raises $ 100 million - TechCrunch

1640169694 Zepto a 10 minute grocery delivery app in India raises

Zepto, a Mumbai-based startup company that operates a 10-minute grocery delivery service, has more than doubled its valuation to $ 570 million from $ 225 million less than two months ago as it expands to cities newer.

Y Combinator Continuity Fund was leading a $ 100 million Series C tour in Zepto, the pair said Monday. Glade Brook, Nexus, Breyer Capital, Lachy Groom, Global Founders Capital and Contrary Capital also participated in the round, which will bring the increase to date to $ 160 million.

The startup, founded by two 19-year-old entrepreneurs who left Stanford last year, came out of stealth mode in November. But long before he started talking about the industry, Zepto had captured a lot of interest from the local startup community as people began to express their opinion about the industry.

Zepto, whose name uses a mathematical term to describe the industry, offering a 10-minute grocery delivery service, a segment that has recently become red hot in several parts of the world. Players with the strong support of Swiggy and BlinkIt (formerly Grofers) have also entered the grocery delivery business immediately.

Zepto’s arrival in view was, too, serendipitous. Aadit Palicha and Kaivalya Vohra had returned to India for some rest before the epidemic took over the country.

The teenagers, who had previously collaborated on several projects, including a travel app for school children, were suddenly found locked in their homes in Mumbai. As the pandemic spread, the two struggled to find their grocery stores even as the delivery of groceries, which was classified as essential by local government, was still allowed in much of the country.

"We felt that the online play of an Indian grocery delivery point, one of the largest in the world, was plagued with some execution mistakes," Palicha said in a more recent interview. early without editing.

In an interview last week, Palicha said that the start - up work is overwhelmed by the support and joy he sees from the customers, but that he does not want to be “somber. ”

"We are a little too critical of ourselves and holding ourselves to the highest standards. People are happy that they are getting the delivery in 10 minutes or less, but can we continue to focus on scaling our SKUs and improving the economy of our unit? ”He said. (But at the same time, Zepto is cautious about keeping its staff and delivery partners happy, he said, drawing attention to retention and internal feedback.)

Vohra said its month-on-month buyer retention is 65% and it has built a network of micro-warehouses, each of which has the capacity to place more than 2,500 orders per day.

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Involved is India’s e-grocery market which is estimated to be worth $ 25 billion by 2025, according to a note from Sanford C. Bernstein. “Online groceries are expected to reach ~ 3-5%, by 2025 from less than 1% today. Long-term structural drivers remain strong: rising incomes and wealth, lower consumption, lower e-commerce revenue (~ 30% CAGR) and young population (~ 50% under 25). Grocery consumption as a proportion of income remains high at ~ 30%, ”wrote his analysts.

Zepto Dark Shop. (Image credits: Zepto)

Zepto currently operates in Bangalore, Delhi, Gurgaon, Chennai and Hyderabad, and plans to soon expand to Pune and Kolkata. To ensure immediate delivery, it has set up tours of more than 100 dark stores across those cities it says are used for fast delivery.

"We're looking at a very subtle runrate," he said. “In the last month and a half, we have grown our business 10 times. And now we are working to grow another 10 times by February or March, ”said Palicha.

Another thing that is moving in the right direction for Zepto is the talent that it has been able to attract in the last few months. Several high-profile executives from Flipkart, Amazon Uber, Dream 11 and Pharmeasy have joined the startup.

Palicha said one of the reasons so many activists have joined Zepto is that it has enabled many who had moved from Mumbai to Bangalore to return to their city. But the aggressive growth of startups, controlled executions, and intentions has made it appealing to people with similar tastes, he said. "We were able to walk the walk," he said.

“We are thrilled to be duplicating and leading this tour in Zepto (YC W21). Since Aadit and Kaivalya went through Y Combinator, we have seen them become unique founders who bring non-stop focus and “Doordash-like execution” to the fast-paced trading model, ”said Anu Hariharan, a partner at Y Combinator, in a statement.

“They first launched with a different model, fast trading fast in August 2022 and are now adding 100,000 new customers every week, 60% of whom are women. The attention to detail on the logistics experience is unmatched and this allowed them to scale to most major metros in just 5 months. Quite simply, we are confident that Zepto will win in this place in the long run. ”

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