Quick-commerce startup Zepto, which has its sights set on an initial public offering (IPO) within the next two to three years, revealed on Wednesday that a significant portion of its 200+ dark stores have become fully profitable. The company, which was among the early adopters of ultra-fast delivery for groceries and everyday essentials, stated that its business has grown fourfold over the past year. This achievement comes at a time when funding for startups has slowed down, prompting companies to focus on cost reduction, minimizing burn rates, and showcasing a path to profitability.
Data sourced from market research firm Tracxn indicates that funding for technology startups plunged over 75% year-on-year to $2.8 billion in the January-March quarter. Despite the challenging funding landscape, the company has managed to thrive, with its dark stores proving to be lucrative ventures. These dark stores, strategically located to ensure quick and efficient delivery, have played a crucial role in the company’s success.
Alongside the news of profitability, Zepto also announced significant changes in its leadership team. Vinay Dhanani, the company’s current Chief Operating Officer (COO), will be promoted to the position of President, Supply Chain and Category. Meanwhile, Vikas Sharma, who has been serving as Senior Vice President of Operations, will assume the role of COO. Additionally, Zepto has appointed Viral Jhaveri as its new Chief Growth Officer.
Zepto’s co-founder and CEO, Aadit Palicha, expressed his confidence in the capabilities of the leadership team. He stated, “Through best-in-class execution over the past 12 months, Zepto has multiplied its business by 4X and turned dozens of dark stores fully profitable. Vinay, Viral, and Vikas have been instrumental in delivering this exceptional performance, which is why these elevations are truly well-deserved. With a leadership team as strong as the one we have today, I am confident that we will build Zepto into a generational public company within 2-3 years.”
Founded in 2021 by Stanford University dropouts Palicha and Kaivalya Vohra, Zepto has attracted investments from prominent firms such as Y Combinator Continuity, Glade Brook Capital, and Nexus Venture Partners. In May of last year, the startup secured $200 million in funding, valuing the company at $900 million.
The leadership changes within Zepto reflect the company’s focus on strengthening its management team to sustain its growth trajectory. Vinay Dhanani’s promotion to President, Supply Chain and Category acknowledges his contributions to the company’s operational success. Vikas Sharma’s appointment as COO recognizes his valuable experience in overseeing operations. Additionally, the addition of Viral Jhaveri as Chief Growth Officer signifies Zepto’s commitment to expanding its market reach and customer base.
With the backing of investors like Y Combinator Continuity, Glade Brook Capital, and Nexus Venture Partners, Zepto has received significant support in its journey toward becoming a generational public company. The $200 million funding round last year underscored the confidence these investors have in Zepto’s potential and the value of its innovative quick-commerce approach.
The impressive growth of Zepto’s business in the past year not only showcases the company’s resilience in a challenging funding environment but also underscores its ability to meet the evolving needs of consumers. By streamlining operations and achieving profitability in its dark stores, Zepto has demonstrated its commitment to financial sustainability and long-term success.
As Zepto continues to expand its footprint and optimize its operations, it aims to position itself as a leading player in the quick-commerce space. The company’s goal of launching an IPO within the next two to three years demonstrates its ambition to further scale its operations and solidify its market presence.
Zepto’s success in achieving profitability in its dark stores demonstrates the viability and growing demand for quick-commerce solutions in the market. By focusing on delivering essential items within 30 minutes, the company has carved out a unique position in the competitive e-commerce landscape. As Zepto continues its expansion and aims for an eventual IPO, industry observers will closely monitor its progress and assess the potential impact it may have on the future of quick-commerce and ultra-fast delivery.
