Stanford Dorm Rooms to Fastest Grocery Startup in India, The Zepto Success Story

It did not take years to get groceries on your doorstep, Zepto delivered within the next 10 minutes. However, this was not a promise of the large corporate team. It was the invention of two young friends who left Stanford University and created something radical and new.

Two Young Founders

Aadit Palicha and Kaivalya Vohra are friends and attended the same school (Stanford University) in the USA to study computer science. They had greater plans in life. Online services were transforming the world; they felt that they were able to create their own startup rather than completing college. And so they fell out, and made their way back to India with a great notion.

They had previously attempted a similar business with KiranaKart, a grocery delivery service, which was also tied to local neighbourhood stores. It was not bad but they were aware that they could do it better. It is then that they conceived of Zepto in April 2021, a service that would deliver groceries in an unheard of time: less than 10 minutes.

Even the name Zepto is derived out of the word zeptosecond, which is one of the smallest units of time, foreshadowing the speed as the center of their mission.

Why 10 Minutes? The Idea Behind Zepto

In the COVID-19 pandemic, individuals were confined to home and grocery purchases were not fast. Aadit and Kaivalya found an opportunity in this to introduce the fast convenience in life. They understood that by speeding up the delivery time to people to minutes instead of hours or days, they would transform the shopping habits permanently.

However, it is not easy to deliver groceries within ten minutes. They required a system that could be operated at a very high rate. Therefore, they invented such thing as dark stores, small warehouse-like centers which are located within cities. These stores had stock at the areas near the customers location such that when an order was made, they could pack and ship immediately.

Zepto delivery became fast and efficient through intelligent utilization of technology: some real-time tracking of demand and efficient routing. The company claims that there are occasions when they do it even in less than 9 minutes on average.

Funding the Dream

Zepto was not only growing in speed but also in terms of investment and belief to big investors who saw the thing through.

Zepto in the initial year received a pre-seed round of approximately 730,000,Later in 2021, Zepto raised 60 million, and 100 million additional in a round that valued it at approximately 570 million.

As of 2023, Zepto had raised approximately 200m at a valuation of $1.4 billion, becoming a unicorn, or a company valued at more than 1 billion dollars.

In 2025, the company will elevate further and achieve a valuation of about 7 billion, increasing its revenue by $450 million as the quick commerce rush persisted.

This rapid capital and valuation increase indicated that investors believed that there was massive potential in what Zepto was developing, a new model of delivering the everyday needs to the doorsteps of people in just a few minutes.

Rapid Growth Across Cities

Zepto did not keep long in one of the cities. It began in Mumbai and soon spread to Bengaluru, Delhi, Gurugram, Hyderabad, Chennai, Pune, Kolkata and others, and is currently operating in most of the largest cities of India.

Nowadays, Zepto operates hundreds of dark stores in these cities. All these stores are filled with thousands of products, including fresh fruits and vegetables as well as daily essentials and even snacks.

The local stocking system translates to the fact that after ordering something on the Zepto app, the local dark store collects the products and sends them on a scooter/bike all within minutes. It is a sort of mini-grocery store in every neighbourhood.

Challenges Along the Way

There is no single success story that does not have issues. The fast growth of Zepto came with operational and competition pressures. The market in grocery delivery is overcrowded with large companies such as Swiggy Instamart, Blinkit, Dunzo and others that are fighting to attract customers by offering a quick service.

Controversies and complaints have not been left behind, either, including reports of quality problems, price variances or delivery issues by customers, a usual negative to rapid expansion delivery services, which have to compromise speed and quality. These imply that it is not always easy to retain customers in large numbers.

But Zepto is constantly developing solutions and new ideas on how to make the service even better.

Looking Ahead

Zepto is not only stopping at grocery delivery because of its technology and audacious model. It has intentions of venturing into other quick-commerce segments and even public listing (IPO) in the future, which will be amongst the largest tech stories in India.

The company hopes to be profitable in the nearest future and hopes to continue improving its network without compromising on the velocity of delivery as its major strength.

<p>The post Stanford Dorm Rooms to Fastest Grocery Startup in India, The Zepto Success Story first appeared on Hello Entrepreneurs.</p>