Zepto Eyes IPO By 2025 After $350 Mn Funding, Aiming For PAT Positive Next Year

Zepto CEO CEO Aadit Palicha revealed that 99.8 per cent of products on Zepto's platform are sold above cost

Zepto plans to expand its footprint from 24 cities to over 50 by the next quarter.

Source : Zepto

Quick commerce company Zepto, buoyed by a fresh $350 million funding round from marquee domestic investors, is steering towards becoming a fully Indian-owned entity and achieving profitability by FY26, according to co-founder and CEO Aadit Palicha. He also hinted at a potential IPO by 2025.

In an interview to PTI, Palicha countered criticisms that the quick commerce model undermines traditional kirana stores, labeling such claims as "data-free narratives" that overlook the industry's contributions to job creation and economic growth. "Instant 10-minute delivery models have generated over 4.5 lakh jobs, offering wages that are significantly higher than the informal sector average,” he said, adding that Zepto is leveraging Indian technology to provide unmatched grocery delivery services.

Addressing allegations of predatory pricing, Palicha revealed that 99.8 per cent of products on Zepto's platform are sold above cost. "Anyone doubting this is welcome to review our books. These claims simply don’t hold up against mathematical facts," he said.

Palicha also dismissed fears that quick commerce threatens kirana stores, citing data that shows growth across all retail formats. “India is expected to see $200 billion in incremental consumption. Economically, it’s impossible for kirana stores to shrink,” he asserted.

On issues like food quality and safety, Palicha acknowledged industry challenges but emphasized Zepto’s alignment with regulatory bodies like FSSAI. “We see them as partners in serving customers better,” he said.

Zepto’s recent funding round, led by Motilal Oswal’s Private Wealth division, aims to increase domestic ownership in preparation for the IPO. The company is also expediting its transition from Singapore to India, with plans to achieve full Indian ownership by FY26.

Zepto plans to expand its footprint from 24 cities to over 50 by the next quarter, with a top-line revenue target exceeding $1 billion by April-May 2024. The company has already reduced profitability timelines for individual stores from 23 months to 8 months. "In the next financial year, we will be PAT positive, which will send a strong signal to the market," Palicha said.

The company’s coffee venture, Zepto Cafe, has seen "phenomenal results," with Palicha projecting it to become a Rs 1,000 crore business. The initiative has boosted customer engagement and retention for the core business.

While acknowledging competition from Blinkit and Swiggy Instamart, Palicha maintained that the market is large enough to accommodate multiple players. “We focus on execution rather than competition. The opportunity here is immense,” he said.

With strong growth momentum and a clear roadmap to profitability, Zepto is positioning itself as a key player in India’s burgeoning quick commerce sector.