Zepto aims for IPO in 2025 with a focus on full Indian ownership

Zepto, the quick commerce company, recently secured a significant $350 million funding round from leading domestic investors, putting it on track to become a fully Indian-owned entity and achieve profitability. Co-founder and CEO Aadit Palicha expressed confidence about a potential IPO in 2025.

In an interview with PTI, Palicha dismissed concerns that the quick commerce model disrupts traditional kirana stores, calling such claims unfounded and lacking real data. He highlighted the industry's "net positives” including substantial job creation and economic value. Palicha emphasised that Zepto's 10-minute delivery model has created lakhs of jobs, boosted wages, and delivered value to both consumers and workers. He also noted that scaling the quick commerce model for groceries and daily essentials is an achievement unmatched globally, showcasing the distinctive capabilities of Indian technology.

Armed with data, Palicha addressed allegations from retail distributors regarding predatory pricing, asserting that 99.8% of the platform's products are sold above cost.
"So the predatory pricing allegation similar to the other 'data-free narratives' created about quick commerce over the past few years, doesn't actually stack up and we are happy to have anyone who doesn't believe it to come to our office and take a look at our books because it is a mathematical fact," he stated.

Regarding concerns about food quality and safety, Palicha acknowledged the industry's challenges in enhancing consumer-friendly processes. He welcomed the scrutiny, emphasising that the company’s interests are aligned with those of its customers. "So we're not at loggerheads with FSSAI...We look at them as a partner that can help us serve our customers better," he added.

Highlighting India's growth potential, Palicha cited estimates predicting over $200 billion in incremental consumption. "It is economically impossible that the kirana store is shrinking... We are growing but so are the kirana stores, and so are other formats of commerce," he remarked.

"...most importantly, this is Indian technology, it's a real infrastructure. I think it's a fantastic thing, and we should be celebrating new Indian technology. Nowhere else in the world at scale you can tap a button on your phone and get your day-to-day essentials like shampoos and rice delivered in 10 minutes," he added.

Zepto’s recent funding round, led exclusively by Motilal Oswal's Private Wealth division, attracted investments from Indian high-net-worth individuals, family offices, and leading financial institutions. Palicha shared that the primary goal of the round was to boost domestic ownership ahead of a planned IPO in 2025.

On the company’s progress toward shifting its domicile from Singapore to India, Palicha affirmed that the process is nearing completion. "We're willing to commit that within the next financial year, sometime in FY26 we will become a full Indian-owned company...that's our ambition and objective, and it looks quite likely that we're going to get there," he said.

Also Read- Zepto introduces Jarvis its in-house advertising service

Zepto’s growth trajectory remains robust, with plans to expand to over 50 cities by the next quarter, building on its presence in about two dozen cities currently. "In April-May 2024 we hit a billion dollars in top line. We're already multiplied on that base, and we expect to continue to multiply. Very soon we (will) make another large milestone on hitting another big top-line threshold...one of the fastest-growing consumer companies in the country right now," he noted.

Palicha highlighted the company's strides in profitability, with more stores turning profitable within just 8 months, down from 23 months previously. "In the next financial year, we will be PAT positive. We are quite confident, and that hopefully will be a positive signal to the markets," he added.

Zepto Cafe, a growing segment of the business, is also delivering impressive results accoridng to him. "We will get to Rs 1,000 crore business in Zepto Cafe alone...customers love it. It's giving us more frequency and retention in the core business...People are opening the app multiple times," Palicha said.

Addressing competition from Blinkit and Swiggy Instamart, Palicha welcomed the challenge, asserting that the market has ample space for all players. "There is plenty of room for everybody, so we feel good about it, in a nutshell, and we just focus on our own execution...We don't think too much about competition, and we think the market is large enough," he concluded.