Zepto, another name that has been popping out in the e-commerce quick delivery sector. Until now this new member has entered almost everybody’s mobile, but how is this new quick delivery service making money to run its business among the established players in the industry? That’s where the question serves – Is Zepto Profitable?
The e-commerce quick delivery sector has seen many players getting established and making profits to run their business, where a new student Zepto, got added in 2021, and has 200+ dark stores in major cities. Online delivery, these two words have actually summed up everyone’s life at present, isn’t it right! The ease, convenience and fast delivery they provide, we all are now used to it.
Without any delay let’s get started with the discussion of Is Zepto Profitable? and uncover its year-on-year business results to get a clear picture of this new member of the e-commerce sector.
Here we start!
Zepto: Uncovering YOY Business Results
The venture was established by two college dropouts Aadit Palicha & Kaivalya Vohra in 2021. The idea behind the starting Zepto was to overcome the difficulty of late delivery service which they faced. Zepto promises to provide quick and easy deliveries with just a few clicks at your doorstep within just 10 minutes. The aim was to shorten the time span of delivery services in India.
Zepto legal is Kiranakart, which the founders initially started in September 2020, to connect local vendors directly to the customers in the pandemic period. After this the founders took some time to start the extension of Kirana Technologies Limited, Zepto in 2021.
Note: Want to know more about how these two friends started this online delivery business and how this business operates, visit our article Zepto Business Model, to know more about it.
Revenue Generation of Zepto
Zepto’s dark stores has reached profitability within just 15-18 months post its establishment, however it takes around 24 months on an average basis for a grocery or supermarket store to set up.
Zepto has recorded well for its revenue as compared to last year’s revenue, but also has witnessed triple losses. The increased revenue was the result of new customers trying out Zepto’s services and new features they upgraded and its increased store counts. Zepto currently has 200+ dark stores that deliver a vast product range.
Zepto marked an 14X increase in its revenue in FY23 as compared to FY22 revenue generation. In terms of revenue Zepto has left behind its competitor Blinkit in FY23. The company’s average monthly sales stand at Rs.400 crores +. The company has confirmed that it will go public by early 2025, and currently Zepto has 24-25% of market share.
Zepto became the first unicorn in August 2023 by raising $200 million in a series E round of funding at a valuation of $1.4 billion.
With this the company has opened nearly 100 new stores in major cities by seeing the growth of new customers, however with this the company has also logged some increases in their expenses.
Losses of Zepto
As we see for the current year Zepto does a huge jump in its revenue generations, but along with the company has witnessed triple losses.
Let’s have a look at Zepto losses apart from having a good revenue number.
Zepto losses surged to 3.35X in FY23, a total increase of 226% in its losses as compared to its last year losses. The loss of the company mainly resulted from opening new stores and from company expenses.
Apart from this the company has reduced the amount in their monthly cash burn. In April 2023, the company reported Rs.55 crores in their cash burn, which was reduced from Rs.90 crores of September 2022. This meant that with their lower cash burn rate, the company was on their way on to turn positive on their earnings in various domains.
Expenses Of Zepto
Let’s see another factor that encounters and constitutes to the overall discussion of – Is Zepto Profitable?
This quick commerce startup has reported a notable increase in its expenses in FY23 as compared to FY22, this also resulted in the total net loss of the company.
Apart from this Zepto’s employee related expenses also increased and saw a huge jump as compared to its last year expense of FY22. In FY23, Zepto employee related expenses reached Rs.263 crores, while in FY22, Zepto spent Rs.51 crores.
Is Zepto Profitable?
No, as of now Zepto is not profitable. For the current year 2023, Zepto saw a loss Rs.1,272 crores, which is a triple increase in its losses as compared to last year loss of Rs.390 crores. Apart from the losses Zepto saw an increase in their revenues in FY23 of Rs.2.024 crores from last year’s revenue.
However, Zepto has increased its number of dark stores this year as they saw more and more customers coming on their platform and trying out their services and features.
Summing Up: The Profitability Discussion
Here, we reached the final lookout of this discussion of – Is Zepto Profitable. With time Zepto is emerging in becoming a key player in the quick delivery e-commerce sector. For the current year 2023, Zepto has reported a huge loss as compared to last year along with a huge increase in its expenses. However, the co-founder of the company has announced that the company is planning to go public by 2025.
This YOY business results of Zepto serves as the route to know the company’s financials till date, that counts both its losses and success. However, the financials of the company can change or evolve with time.