Zepto Incurs INR 390 Cr Loss In First Year Of Operations; FY22 Sales At INR 141 Cr

Zepto Incurs INR 390 Cr Loss In First Year Of Operations; FY22 Sales At INR 141 Cr

SUMMARY

Zepto spent INR 175.5 Cr on advertisement and promotional expenses in FY22, almost 33% of its total expenses

Zepto’s last valuation of $900 Mn is 48X times of its total revenue in FY22

Zepto spent INR 3.7 to earn a single rupee in FY22

Mumbai-based quick commerce platform Zepto incurred a loss of INR 390.3 Cr on a standalone basis in its first year of operations in financial year 2021-22 (FY22). The Nexus Venture Partners-backed startup’s total revenue stood at INR 142.3 Cr in FY22. Zepto, which began operations in April 2021, had total expenses of INR 532.7 Cr in FY22. 

In FY22, the startup’s revenue from operations stood at INR 140.7 Cr. Zepto primarily engages in wholesale distribution of groceries, fruits, vegetables, and personal care among others. The startup recognises revenue upon transfer of control of promised goods or services to customers. The startup, which claims to deliver grocery and fruits products in 10-20 minutes, was last valued at $900 Mn. This valuation translates to about 48X of its total revenue. 

Meanwhile, Zepto also earned INR 1.6 Cr through other income, which mostly comprises interest earned on investment. In FY22, Zepto’s EBITDA margin was -259.39%

On the expenses front, the startup spent aggressively on marketing during its first year of operations. Its advertising and promotional expenses stood at INR 175.5 Cr during the year, nearly 33% of its total expenses.

Apart from this, the startup spent INR 213.2 Cr for purchases of stock-in-trade in FY22. Supply chain expenses stood at INR 74 Cr, while employee benefit expenses were at INR 50.3 Cr. 

Employee benefit expenses mostly consist of employee salaries, PF contributions, gratuity, and other employee welfare benefits. As per its Linkedin page, Zepto currently has a headcount of 1,950. 

Zepto Incurs INR 390 Cr Loss In First Year Of Operations; FY22 Sales At INR 141 Cr

In total, Zepto spent INR 3.7 to earn a single rupee during the year. Quick commerce is a cash heavy business. Both Reliance-backed Dunzo and Zomato-owned Blinkit are in heavy losses. While Dunzo saw its total loss climb 2X to INR 464 Cr in FY22, Blinkit’s loss surged to INR 1,019 Cr in FY22. 

As per media reports, Reliance-backed Dunzo is shutting down multiple darkstores and laying off employees to cut costs.

Zepto was founded in 2021 by the then 19-year-olds Aadit Palicha and Kaivalya Vohra, dropouts of Stanford University. 

Earlier, Inc42 extensively reported on the secret equity battle at the quick commerce startup. Formerly known as Kiranakart, Zepto offers grocery deliveries through a network of dark stores and micro warehouses. 

The startup first turned heads when it raised $60 Mn in its Series A round in October last year from Glade Brook Capital, Nexus, and YC Combinator, along with a couple of angel investors. 

Two months after raising its Series A round, Zepto bagged $100 Mn at a valuation of over $500 Mn from Glade Brook, Nexus, Breyer Capital, Lachy Groom, Global Founders Capital, Contrary Capital, and others.  

Earlier this year, the startup raised $200 Mn in its Series C round led by Y Combinator’s Continuity fund. Kaiser Permanente Ventures, along with its existing investors, also participated in the round. 

As per a Redseer report, India’s quick commerce market is expected to witness a 10-15X growth and touch $5.5 Bn mark by 2025. 

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
Unlock 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
Unlock 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Zepto Incurs INR 390 Cr Loss In First Year Of Operations; FY22 Sales At INR 141 Cr-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Zepto Incurs INR 390 Cr Loss In First Year Of Operations; FY22 Sales At INR 141 Cr-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Zepto Incurs INR 390 Cr Loss In First Year Of Operations; FY22 Sales At INR 141 Cr-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Zepto Incurs INR 390 Cr Loss In First Year Of Operations; FY22 Sales At INR 141 Cr-Inc42 Media
Zepto Incurs INR 390 Cr Loss In First Year Of Operations; FY22 Sales At INR 141 Cr-Inc42 Media
You’re in Good company