Zepto Raises $1B in 90 Days, Projects 150% Annual Growth

Zepto co-founder Adit Paricha told analysts and investors on Tuesday that Indian delivery startups expect to grow 150% over the next 12 months, a startling figure that shows India's burgeoning quick commerce market shows no signs of slowing down.

Paricha made these remarks during a conference call hosted by the investment bank, which also included representatives from several prominent investment firms, including the Abu Dhabi Investment Authority, Temasek, GIC and Invesco, according to a document reviewed by TechCrunch.

A company spokesman declined to comment when contacted early Tuesday.

Zepto's annual sales recently topped $1.5 billion, Paricha said, adding that if it were to grow by about 150 percent, sales would exceed $3.5 billion. Zepto competes with Zomato's Blinkit, SoftBank-backed Swiggy Instamart and BigBasket, all of which lure customers with delivery services within 10 to 15 minutes. Blinkit currently has sales of about $2 billion.

Quick commerce is rapidly gaining momentum in India's $1.1 trillion unorganized retail market. Zepto, BlinkIt, Swiggy and Tata-owned BigBasket's BBNow are expected to clock combined annual sales of more than $6 billion, while overall e-commerce sales are about $50 billion. BigBasket, an online grocer that delivers groceries to customers within hours, said on Tuesday it was pivoting entirely to quick commerce.

India's e-commerce market is growing at about 11% to 12% a year, according to industry statistics. Quick commerce, by contrast, has grown more than 100% each of the past three years. Quick commerce companies are “clearly taking share from the larger e-commerce players,” said Rahul Malhotra, an e-commerce analyst at Bernstein.

Investors on Tuesday's call asked Paricha about the likelihood of Quick Commerce expanding beyond the top 12 or so cities in India, given that quick commerce apps currently operate primarily in metros. “Quick commerce is not a tier 1 phenomenon,” Paricha said. “Regardless of market sentiment, our data clearly shows that there is a huge opportunity in tier 2/3.”

He also confirmed during the call that Zepto has raised $1 billion in the past 90 days, a funding he said will allow the company to expand more aggressively.

TechCrunch previously reported that Zepto, now valued at $5 billion, was closing a $340 million funding round led by General Catalyst. The startup closed a $665 million funding round in June.