Goldman Reports: Zepto’s Annualized Sales Skyrocket to $1.2B in Just 29 Months in India

Indian quick-commerce startup Zepto has surpassed the annualised sales milestone of $1 billion within just 29 months of its inception, Goldman Sachs wrote in a note Thursday, citing the Zepto management. Zepto, which became a unicorn last year, counts YC Continuity, StepStone Group, Glade Brook Capital and Lachy Groom among its backers. “Overall EBITDA margin for Zepto is at negative single-digit percentage and the company is on track to break even at the EBITDA level within the next quarter. The company expects steady state contribution margin of 12%, with steady state EBITDA margin of 7%,” the report added. Zepto believes it can expand into 40-50 cities over time,” the report added.

Indian quick-commerce startup Zepto has accomplished a remarkable feat, surpassing $1 billion in annualized sales just 29 months after its inception. According to a note from Goldman Sachs, Zepto’s management has confirmed the achievement, solidifying their position in the market.

“Zepto is quickly gaining momentum and its market share is inching closer to that of the second-highest player in the industry, which is a significant accomplishment,” the report stated.

The startup, which directly competes with Blinkit (owned by Zomato) and Swiggy Instamart (backed by SoftBank), boasts impressive financial backers such as YC Continuity, StepStone Group, Glade Brook Capital, and Lachy Groom. Zepto currently operates in seven major Indian cities and leverages its network of over 300 dark stores (also known as micro-fulfillment centers) to provide express delivery of various products, including groceries and electronics, to its customers.

The investment bank was informed by Zepto’s management that they currently process around 550,000 orders daily, with the promise of delivering items within 10 minutes of placing an order. Not only is Zepto delivering orders faster than ever before, but the company is also showing significant improvement in its finances.

“Zepto’s overall EBITDA margin is currently at a negative single-digit percentage, but the company is on track to break even at the EBITDA level within the next quarter,” the report stated. “The company expects a steady state contribution margin of 12%, with a steady state EBITDA margin of 7%.”

The report also mentioned that according to Zepto, their newly opened dark stores are turning profitable within just 9 months (compared to 15-18 months previously), with an impressive throughput of 1,500 orders per day per store.

Instant-commerce companies are fast becoming a force to be reckoned with in India, not only competing with traditional supermarkets and neighborhood stores but also challenging the dominance of e-commerce giants like Flipkart and Amazon. In just three years, India’s quick-commerce sector has skyrocketed beyond $5 billion, capturing more than half of the online grocery market and achieving a scale on par with major Indian supermarket chain Dmart, according to Goldman Sachs.

“According to Zepto, quick-commerce platforms have a distinct advantage over Kiranas (traditional grocery retailers) due to better sourcing, resulting in superior pricing, product assortment (with 5x higher SKUs), quality control, and delivery time (ability to deliver within 15 minutes),” the report stated. “Zepto is optimistic about expanding its operations to 40-50 cities in the future.”

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Max Chen

Max Chen is an AI expert and journalist with a focus on the ethical and societal implications of emerging technologies. He has a background in computer science and is known for his clear and concise writing on complex technical topics. He has also written extensively on the potential risks and benefits of AI, and is a frequent speaker on the subject at industry conferences and events.

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