Dropout Teenagers From Mumbai Raise Rs 750 Crore For Their Startup: What’s Their USP?

They began the startup with its USP being a grocery delivery time of 10 minutes.

Yet another startup is fast approaching the unicorn status as grocery delivery app Zepto raises $100 million at a $570 million valuation.


Moving At Lightning Speed

A funding round led by high profile incubator Y Combinator, took place just within five months of starting services.

Just 45 days before, the company had raised capital of $60 million at a $225 million valuation.

The company founded by Aadit Palicha (also CEO) and childhood friend Kaivalya Vohra (CTO), both 19, coined the name Zepto after a minuscule unit of time.

New Player In Q-Commerce

Both were enrolled in the coveted computer science program at Stanford University which they dropped out of to return to India.

They began the startup with its USP being a grocery delivery time of 10 minutes.

It is part of a new sub-vertical of online grocery segment— Quick Commerce, or q-commerce which promises deliveries within 10-30 minutes of ordering.

Q-Commerce makes use of micro-warehouses located in high-demand neighborhoods.

Zepto’s Model

The stocks in these ‘dark stores’ are limited to under 2,000 high-demand items, as against the convention of well-stocked large-format warehouses located on the outskirts.

Zepto’s network consists of a network of 100 so-called dark stores, or micro-warehouses.

It utilises technology to decide store locations, placement of products and mapping out delivery routes to avoid traffic congestion.

Market Size And Competition

It started in Mumbai earlier this year and has since expanded to Bangalore, Delhi, Gurgaon, Chennai, Hyderabad and Pune (Kolkata to follow).

Zepto is yet another player looking to capture a significant piece of India’s $1 trillion retail market in which grocery purchases account for the bulk of the retail spending.

Competitors include established names such as the rebranded Blinkit (earlier Grofers), Dunzo, Swiggy, etc.

Inspired By Global Leaders

Palicha says that his company has quick growth and strong core unit economics on its side

It will use the fresh capital to grow its team and expand to more cities.

Its business model is inspired by the US’ largest food delivery company DoorDash, says Anu Hariharan, a partner at Y Combinator’s Continuity Fund.

She added that the new startup is adding 100,000 new customers every week of which 60% are women.

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