Indian quick-commerce startup Zepto has achieved a significant milestone by surpassing $1 billion in annualized sales within just 29 months of its inception, according to information shared by Zepto management and cited by Goldman Sachs in a note on Thursday.
Competing with industry players like Zomato-owned Blinkit and SoftBank-backed Swiggy Instamart, Zepto has also been gaining market share rapidly, now standing close to the number 2 player in the market. The startup, which became a unicorn last year, boasts a roster of notable backers including YC Continuity, StepStone Group, Glade Brook Capital, and Contrary.
BlinkIt, acquired by Zomato for $568 million in 2022, currently holds a prominent position in the instant-commerce market. Zomato co-founder Deepinder Goyal expressed confidence that BlinkIt would surpass its parent company in size within a year.
Founded by two college dropout teens, Zepto operates in seven Indian cities and leverages a network of over 300 dark stores to provide customers with speedy delivery of items across various categories such as groceries and electronics. With a promise to deliver within 10 minutes of order placement, Zepto is currently processing approximately 550,000 orders daily.
The startup is also demonstrating strong financial progress, with an overall EBITDA margin at a negative single-digit percentage. Zepto aims to achieve EBITDA level breakeven within the next quarter and anticipates steady state contribution margin of 12% and steady state EBITDA margin of 7%. Notably, newly opened dark stores are becoming profitable within 9 months, compared to the previous timeframe of 15-18 months, with a throughput of 1,500 orders per day per store.
Instant-commerce companies like Zepto are reshaping the Indian retail landscape, challenging not only traditional supermarkets and neighborhood stores but also major e-commerce players like Flipkart and Amazon. The quick-commerce sector in India, which emerged only three years ago, has surged past the $5 billion mark, capturing over half of the online grocery market and achieving a scale comparable to prominent Indian supermarket chain Dmart, according to Goldman Sachs.