Indian 10-min grocery app gets $100m in series C 📦

By the time you’ve finished reading this story, a delivery executive in one of the metropolitan cities in India might have handed over a bunch of vegetables, or some medicine, or a few bars of chocolate to a customer. These are just some of the many grocery store items that consumers need to have within 1o minutes.

Zepto is one of the players in a growing crowd of quick commerce apps that have become beneficiaries of a lockdown-fueled funding bonanza.

Photo credit: Zepto

Founded earlier this year by Aadit Palicha and Kaivalya Vohra – both dropouts from Stanford University – Zepto aims to deliver groceries in 10 minutes through a network of stores. 

The company has raised US$100 million in its series C financing round led by Y Combinator’s Continuity Fund, along with participation from Glade Brook, Nexus, Breyer Capital, Lachy Groom, Global Founders Capital, and Contrary Capital, among others.

The latest investment, which comes 45 days after Zepto’s previous fundraise, lifts the company’s valuation to US$570 million, CEO Palicha told Tech in Asia.

Zepto’s new capital will be used to expand its coverage across multiple cities in India and to ramp up hiring across functions including operations, supply chain, marketing, finance, product, engineering, and human resources.

“Delivering groceries in 10 minutes is a game changing experience for customers and it reflects in our strong product-market fit metrics,” said Vohra, who serves as the company’s CTO. “This data has given us the confidence to expand the 10-minute model across the country.”

Zepto said it has been tripling its user base every month. Its month-on-month buyer retention stands at 65%, with an 88-point net promoter score, a customer loyalty and satisfaction metric.

Within five months of the company’s launch, it has set up 100 microwarehouses – each of which has the capacity to deliver over 2,500 orders per day. Zepto also plans to launch microwarehouses at a faster rate in the coming months.

A quick pivot

Zepto initially kicked off with a slower delivery model, ensuring orders reached customers in about an hour. The company pivoted to quick commerce in August 2021, and are now adding 100,000 new installs every week, with 60% of them being women.

(From left) Zepto founders Kaivalya Vohra and Aadit Palicha / Photo credit: Zepto

“The need for quicker delivery stems from our frustration as understocked bachelors to wait for six to seven days to get essential grocery delivered,” Palicha said, referring to himself and Vohra.

10 minutes? Really?