Zepto’s rapid rise: CEO Aadit Palicha expects Rs 2.5 lakh crore revenue for unicorn in a decade

Zepto co-founder and CEO Aadit Palicha said that Zepto, a unicorn in the fast-paced trading space, could see its revenue grow several fold to Rs 2.5 lakh crore in five to 10 years if the company is able to execute its business well.

“If we play this right, we can realistically grow the revenue of this business from over Rs 10,000 crores to potentially… Rs 2.5 lakh crores in the next 10 years or the next five years,” Palicha said.

In his speech on the occasion of JIIF’s 7th Founding Day, Palicha said that grocery and home goods are the mother of all categories sold on leading e-commerce platforms Flipkart and Amazon in India.

He added that the grocery and home products market in India is valued at around $650 billion in fiscal 2023, is growing at 9 per cent CAGR (compound annual growth rate) and is expected to reach around $850 billion by fiscal 2029.

“Your grocery is bigger than all the other categories that Amazon and Flipkart serve combined. If you look at electronics, apparel, furniture, combine everything and double that, it’s still not as big as grocery and home goods,” Palicha said.

The company’s revenue grew more than fivefold to over Rs 10,000 crore in FY2024 from around Rs 2,000 crore in FY2023. Last month, Zepto raised $665 million in an investment round that valued the company at $3.6 billion, almost three times more than a year ago, and is preparing for an imminent stock market listing.

The three-year-old startup has raised $665 million (around Rs 5,550 crore) from new investors, including New York-based private equity firm Avenir Growth Capital, venture capital firm Lightspeed and Avra ​​Capital, a new fund founded by former Y Combinator Continuity chief Anu Hariharan and Andreessen Horowitz.

Existing investors also participated in the project, including Glade Brook, Nexus and StepStone Group.

Palicha said the biggest challenge for the company is hiring people with the right attitude.

The startup plans to double the number of warehouses it has to deliver groceries within a two-kilometer radius within 10 minutes to more than 700 by March 2025, by reinvesting sales from mature stores to fund expansion.

Zepto has about 29 percent of the market share for 10-minute grocery delivery services (known as fast e-commerce), up from 15 percent in March 2022. Blinkit is the market leader with almost 40 percent, with the rest held by Instamart.

“We have managed to fully convert 75 percent of our stores into profitable stores, so we want to continue that trajectory even as we expand to new cities,” Palicha said.

(With tips from PTI)