Zepto Increases Cash Burn From Rs 35 Crore To Rs 300 Crore A Month To Boost Growth, Reveals Report – News18
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The increase in Zepto’s cash burn comes after the company raised Rs 2,500 crore ($300 million) from high networth individuals (HNIs) in India.
Zepto has been working hard to bring in new customers. (Representative Image)
Launched in 2021, Zepto has become a household name among e-commerce delivery platforms. Co-founders Aadit Palicha and Kaivalya Vohra have been at the helm of this expansion. Vohra, 21, was listed as India’s youngest billionaire in the Hurun India Rich List 2024 with a net worth of Rs 3,600 crore while Palicha’s worth stands at Rs 4,300 crore which made him the second youngest billionaire.
As Zepto competes with big names like Blinkit, Bigbasket, Flipkart Minutes and Swiggy Instamart, recent reports suggest that its spending has gone up significantly to keep up with the competition. According to Moneycontrol, the company’s monthly cash burn has increased from Rs 35-40 crore in May to Rs 250 crore by September. The figure reached Rs 300 crore in October. This burn rate is expected to continue into November as the final quarter of the year coincides with the festive season. This rise in expenses is mainly due to heavy investments in operations, digital marketing and customer acquisition.
“(Over) 70 percent of our existing stores have hit full EBITDA profitability. The capital we are burning is primarily for the capex, working capital, and ops set up to launch 100s of new stores per quarter,” Palicha told Moneycontrol.
“Although the investment is upfront, these stores have a better EBITDA trajectory than the older stores – giving us the conviction to invest in launching new stores, which is delivering 200%+ y-o-y growth on a base of 10s of thousands of crores of scale,” he added.
The increase in Zepto’s spending comes after the company raised Rs 2,500 crore ($300 million) from high networth individuals (HNIs) in India.
As per the report, Zepto has been working hard to bring in new customers by offering discounts on popular items such as iPhones. The company is also spending a lot on digital marketing, using ads and paying for keywords on platforms like Google and Meta to reach more people. The report mentioned that Zepto is spending close to Rs 120 crore a month on digital marketing.
“Zepto has realised it’s not the time to go slow, this is when it needs to accelerate which explains the aggression,” a source told Moneycontrol.
Zepto’s rapid growth and aggressive expansion continue to attract investors. The report mentioned that the platform has already raised over a billion dollars this year. The fresh primary round of $300 million (Rs 2,500 crore) further supports its growing plans.
Zepto now has $1.4 billion in cash. At the same time, other companies like Swiggy and Zomato are also making big moves. Swiggy recently made a strong debut in the stock market as it showed a 7.7% premium over its IPO price of Rs 390 on the National Stock Exchange (NSE) and a 5.64% premium on the Bombay Stock Exchange (BSE).
Zomato, on the other hand, plans to raise between $800 million and $1 billion next month via a qualified institutional placement (QIP) of shares.
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