A start-up at Stanford University worth millions, could be India’s Unicorn Tech

“When we started this 12 months ago, every conversation we had was saying, ‘You’re completely out of your mind, this is never going to work,'” said teen CEO Adit Balecha.

However, Palicha has been able to prove these skeptics wrong – it has now approached the case of the unicorn and it is one of India’s fastest growing fast-trading apps. The Unicorn Corporation is a startup valued at over $1 billion.

Zepto is a startup that promises to deliver groceries in less than 10 minutes. Despite being just one of the many companies that joined instant trade The wave, has already caught the attention of investors.

Its last cash injection of $200 million in May 2022 valued the company at $900 million, just nine months after its launch.

Its rapid growth is led by Palicha and Kaivalya Vohra, two 19-year-olds who left Stanford University to pursue their entrepreneurial dreams.

“At that point, we had already expanded our annual revenue to $2 million. We said this was an opportunity to raise a significant amount of capital, the product has clearly become a market fit,” Balicha said. CNBC Make It.

“How many people get a chance in their lifetime to build a potential generation company? We’ve discovered that this is just a more exciting opportunity than studying at a high-end university.”

The idea for Zepto came about in July 2021 – when childhood friends were stuck at home in Mumbai, in the middle of covid-19 pandemic and nationwide insurance.

in time, The demand for delivery services has increased Where many stayed at home.

“Online Grocery [would] Delivery takes six or seven days, and offline options are closed or practically unavailable. “It was very difficult for us to get groceries,” said Balecha, CEO of Zepto.

“We’ve had sort of similar conversations with our neighbors who have pretty much been complaining about the same problem. That’s when we said…why not try to build a solution for people in our area?”

But Palicha and Vohra were no strangers to the instant grocery delivery business. In 2020 – at just 17 years old – they started KiranaKart, which they said delivered groceries in Mumbai in less than 45 minutes.

“Some people were getting deliveries [within] “A time frame of 10 to 15 minutes,” Vohra said.

“In terms of their retention, how much they liked the platform and how often they referred to their friends, [it] It was much higher for those people who got deliveries in that time frame.”

“And that’s why we said, ‘Look, maybe there’s some value in exploring that.'”

They weren’t wrong. According to research from the consulting firm Redseer, Online grocery market in India It could be worth $25 billion by 2025 and that’s an opportunity that was “too compelling to miss,” Paliccha said.

“If you look at all the other major categories of e-commerce – electronics, apparel, you take them all and combine them, it’s a small part of the grocery market,” he added.

So far, the company has attracted $360 million from investors built p, Kaiser Permanente and Nexus Venture Partners. The latest funding round puts the company on course for a potential $1 billion valuation.

One of the key factors to the success of Zepto’s investments, Palicha said, is “operational discipline.”

He added, “When we went to investors this time, we showed very clear ways to be profitable. We’ve gone from $0 in revenue about a year ago to today, and we’re making hundreds of millions of dollars in annual revenue.”

“We’re still talking in terms of multiples and not percentages when it comes to our growth rate, and that’s something we’re happy to do.”

Zepto claims to have been able to cut its cash-burn rate by 5 times on a per-order basis, while achieving an 800% quarter-on-quarter revenue growth.

However, the days easy money for Tech companies that burn cash They went, as high interest rates And the Investors demand more results. However, the young founders remain unfazed.

“We’re in a position where you look at the size of our balance sheet, we’ve actually got a multi-year life of capital, in the context of this downturn,” Balicha said.

“From day one,…we forced ourselves to be efficient to make every dollar last. We are able to fulfill more orders with the same amount of cash, and we can acquire more customers with the same amount of cash.”

The duo said that keeping costs lower than its competitors in the high-growth technology category has given them an advantage.

“This puts us in a position where we can continue to grow sustainably, as others have been forced to… layoffsThey are dragging out their growth plans and essentially shrinking in order to survive in a market like this.”

she was Previously mentioned That Zepto generates between $200 million and $400 million in annual revenue and the founders now hope to “touch the billion mark.”

Balecha added:[Zepto] It came out as a personal project between Kaivalya and [me] To see if we can solve a problem on a small scale in our area.”

“It eventually evolved into the company we are today, and we are incredibly grateful for it.”

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