Zepto Can Surpass DMart’s Valuation With Presence In Top 40 Cities: CEO Aadit Palicha

Zepto founder and CEO Aadit Palicha believes that the quick commerce startup has the potential to surpass the valuation of retail chain DMart by focusing on the top 40 cities in the country.

Speaking at the JITO Incubation and Innovation Foundation’s (JIIF’s) Innovation Conclave, Palicha said the unicorn is looking to expand its presence to the top 40 cities in the country. He added that there are no plans to expand beyond these 40 cities for at least five years.

Palicha said the top 40 cities provide enough headroom for Zepto to take its valuation beyond $30 Bn in the near future if it continues to strengthen its presence there, along with right hires at the top level.

It is pertinent to note that Zepto raised a funding of $665 Mn last month at a valuation of $3.6 Bn. Meanwhile, DMart’s market valuation currently stands at 3.15 Lakh Cr (about $37 Bn). 

“If we execute well, we can realistically take this business from INR 10,000+ Cr top line today to potentially to INR 2.5 Lakh Cr top line over the next 5-10 years,” Palicha said.

While Zepto is yet to file its financial statement for FY24, it saw its operating revenue surge 14.3X year-on-year to INR 2,024.3 Cr in FY23. Net loss stood at INR 1,272.4 Cr in FY23.

Palicha said he and cofounder Kaivalya Vohra were able to identify that there was a gap in the market, with a number of Indians looking to order groceries online and receive them in a short time span. He attributed the startup’s current scale and revenue to the identification of this gap at the right time. 

“Our product-market fit stems from being the first commerce platform that surpasses the proximity advantage with the structural benefits of a large-scale retailer, including price and sourcing leverage, selection, and quality control,” the CEO said.

He also argued that the grocery segment is bigger than all the other verticals that ecommerce giants like Flipkart and Amazon offer. 

“India’s grocery sector surpasses all the categories that Amazon and Flipkart serve combined. Even if you merge electronics, apparel, and furniture, and double it, it still doesn’t compare to the size of grocery and household essentials,” he said.

He reiterated that Zepto is looking to double its dark store count and enter multiple other categories in the grocery segment. Besides, the unicorn is also looking at ways to cut down its delivery time further from the current 10 minutes. 

Zepto, which competes with the likes of Zomato’s Blinkit and Swiggy Instamart, has scaled up rapidly on the back of the rising popularity of quick commerce platforms. However, the competition in the segment is also rising, with JioMart and Flipkart entering the fray.

Amid this, three-year-old Zepto is eyeing to raise another $400 Mn at a valuation of $4.6 Bn. The startup is also looking to reverse flip and is aiming for a public listing in 2026.