YCombinator-backed unicorn Zepto clocks Rs 2,024 crore revenue, incurs Rs 1,272 crore loss in FY23

Founded by Kaivalya Vohra (L) and Aadit Palicha (R) in 2021, Zepto has raised around $560 million and is valued at $1.4 billion.

Zepto, the quick-commerce unicorn, saw its revenue from operations jump from Rs 141 crore in FY22 to Rs 2,024 crore in FY23, helped by an increased store count and new customers trying out the company’s services during the year.

In the whole of FY23, Zepto opened about 100 new stores, mostly in existing locations, as it saw more customers coming on to its platform. Opening new stores, however, proved to be expensive for the company.

The company’s total expenses increased multifold from Rs 533 crore in FY22 to Rs 3,350 crore during the fiscal year gone by, regulatory filings showed. The mounting expenses also resulted in Zepto’s losses widening 3X from Rs 390 crore in FY22 to Rs 1,272 crore in FY23.

Asked where the company was losing money, Aadit Palicha, co-founder and CEO told Moneycontrol that “Most of the losses were because we opened newer stores. For the first 12-15 months, new dark stores require money and from the 19th month we see stores making up for the operating losses.”

As Zepto, which raised $200 million and became the first unicorn of India in 2023, grows it is also diversifying its revenue streams by running ads on the app for instance.

Palicha added that Zepto’s revenues will grow by “at least 2X” in the current fiscal and the company will continue to bring down its cash burn rate.

Zepto had reduced its monthly cash burn from around Rs 90 crore in September 2022 to about Rs 55 crore in April 2023, Moneycontrol had reported earlier.

The monthly cash burn trending lower meant that Zepto was on track to turn positive on an adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) basis (excluding ESOP and other statutory non-cash line items) in 10 months from now, per Palicha.

Employee-related expenses was among the largest cost centres for Zepto. The company spent Rs 263 crore on employees in FY23, a jump of over 5X from Rs 51 crore in FY22. The increase was because Zepto's headcount also increased from around 150 employees at the end of FY22 to over a 1,000 staffers by the end of FY23.

Competitive landscape

The latest results meant Zepto was larger than Blinkit in terms of revenue. Zomato-owned Blinkit saw its revenue from operations zoom 207 percent to Rs 724 crore in FY23 from Rs 236 crore in FY22. Gurugram-based Blinkit’s net loss also widened slightly from Rs 1,021 crore in FY22 to Rs 1,190 crore in FY23.

Zepto’s scale was however smaller than Tata-owned BigBasket despite growing a mere 5 percent. Innovative Retail, the B2C arm of BigBasket, saw its revenue from operations growing from Rs 7,096 crore in FY22 to Rs 7,434 crore in FY23. Its losses jumped 89 percent from Rs 813 crore in FY22 to Rs 1,535 crore in FY23.

Other competitors like Swiggy and Dunzo are yet to file their FY23 financials.