Zappfresh DRHP: Revenue Surges 60% To INR 90 Cr In FY24, Profit Jumps 70%

Delhi NCR-based online meat delivery startup Zappfresh, which has become the latest tech startup to file a draft red herring prospectus (DRHP) for an IPO on BSE SME, posted a 70% year-on-year (YoY) jump in its net profit to about INR 4.7 Cr in the financial year 2023-24 (FY24).

Zappfresh turned profitable in the previous fiscal year with a net profit of INR 2.7 Cr as against a net loss of INR 2.5 Cr reported in FY22.

The IPO-bound startup’s operating revenue surged more than 60% to INR 90.4 Cr in FY24 from INR 56.3 Cr in FY23. It must be noted that its revenue was almost on a YoY basis in FY23.

Founded in 2015 by Deepanshu Manchanda and Shruti Gochhwal, Zappfresh is an online fresh meat and ready-to-cook/eat non-veg products retailer. It is a full-stack business where the meat delivery process starts from procuring fresh produce to processing, storage and delivery. 

While Zappfresh’s top line and bottom line improved in FY24, it’s way below the startup’s projections. It earlier said that it would clock an overall revenue of INR 300 Cr by the end of FY24, with Bengaluru alone contributing INR 70 Cr to it. 

As per the startup’s DRHP, its total revenue from Karnataka stood at INR 13.8 Cr in FY24. Zappfresh is operational only in Delhi NCR and Bengaluru.

Delhi continued to contribute the highest revenue and accounted for 35.7% of its operating revenue. It was followed by Haryana with 27.96% share in revenue.

Zappfresh operates in three segments of meat – chicken, mutton, and seafood. While the chicken business contributed INR 51.1 Cr to its revenue in FY24, growing 61.7% YoY, the mutton segment grew 50% YoY to clock INR 18.5 Cr in revenue.

The seafood business registered the biggest jump in revenue – over 68% YoY to INR 20.8 Cr during the year under review.

Zooming Into Expenses

Zappfresh’s total expenses increased over 54% to INR 83 Cr in FY24 from INR 53.8 Cr in the previous fiscal, with the cost of materials being the biggest expense driver.

Cost Of Materials Consumed: The startup’s spending under this head increased over 66% to INR 68.5 Cr during the year under review from INR 41.2 Cr in FY23.

Employee Cost: Zappfresh’s total employee benefit expenses increased to INR 1.4 Cr in FY24 from about 99 Lakh in the year-ago period.

In that, a little over INR 1 Cr was spent towards salaries and wages.

Ad Expenses: The startup spent INR 5.1 Cr towards advertisements in the reported period as against INR 3.2 Cr spent in this bucket a year ago.

Outsource Service Charges: Zappfresh spent INR 3.8 Cr under this head, which increased 46.6% YoY.

Amid a surge in IPOs in the Indian startup ecosystem, Zappfresh has become the latest startup to make the bid to go public. 

Its public issue comprises a fresh issue of 59.06 Lakh equity shares with a face value of INR 10 apiece. No existing shareholders are offloading their stake in the startup through an offer for sale component in the IPO.

The development comes days after Zappfresh acquired Mumbai-based online meat and seafood delivery brand Bonsaro to enter the western region of the country.