Zepto’s monthly cash burn crosses Rs 250 crore as costs rise; completes Rs 2,500 crore financing: Report

Online fast-commerce platform Zepto’s cash burn has exceeded $Monthly revenue hit Rs 250 crore in last two months amid growing competition in fast commerce segment, news portal reported Fund control.

Zepto’s increased cash burn comes as the company closes a funding round $Indian high-net-worth individuals have provided Rs 2,500 crore in funding to build a fund to compete with rivals and gain market share.

The company’s monthly cash burn, or the company’s monthly losses, shows the following trend: $In May this year, four people familiar with the matter told a news portal that the figure was Rs 35-400 million. Cash burn increased more than sixfold in the past three months as the company ramped up investments in operations, digital marketing and recruiting, the report said.

Zepto Burn Rate

Kuaishang platform was burned down $Cash burn of 2.5 billion rupees in September, monthly cash consumption as high as $In October, a news portal reported that the figure was Rs 3 billion, citing two people familiar with the matter. The burn rate is expected to remain at $Revenue in November also touched Rs 300 crore, they said.

This is comparable to the country’s festive period, which is the busiest quarter for e-commerce and quick commerce platforms.

“(More than) 70% of our existing stores are fully EBITDA profitable. We are burning capital primarily on capital expenditures, working capital and operations to open 100 new stores per quarter,” said Zepto CEO and co-founder Aadit Palicha told the news portal, confirming the development.

“While the investment is upfront, these stores have a better EBITDA trajectory than older stores – giving us the confidence to invest in opening new stores and achieve over 200 per cent year-on-year growth on a multi-billion rupee scale basis,” he said.

Why are Zepto costs soaring?

According to people quoted in news reports, Zepto has been investing heavily in digital marketing, performance marketing, buying keywords on Google and Meta, and offering discounts to acquire customers.

“The rate of keyword purchases has increased over the past month or so due to Zepto’s high bids. Some other companies have stopped spending because it doesn’t make sense to acquire customers at this rate,” the news report quoted One person’s words.

The company’s spending is close to $Digital marketing generates revenue of Rs 120 crore per month and is now the leading app in the category. “Just look at their download numbers on Playstore,” another person told the news portal.

“It has become crazy, they are now giving salary increases of up to 50-60% to poach talent,” one of the people mentioned above said, highlighting the fierce competition in the fast-moving business sector.

The company offers higher discount rates on products listed on its platform, especially its wholesale arm Super Saver, to lure customers away from other apps and expand its trading user base. They also offer attractive discounts on iPhones, offering at least $The latest model is reportedly available with a $4,500 discount.

“Zepto has realized that now is not the time to slow down but to speed up, which explains its aggressiveness,” a person familiar with the company’s operations told the news portal.

Zomato-owned Blinkit, Swiggy Instamart, Tata’s BigBasket and Flipkart Minutes are Zepto’s competitors in the quick commerce market.

Zepto’s latest round of funding

The fast-moving commerce startup has raised more than $1 billion this year, and its latest round is $According to news portals, Rs 2,500 crore of funds from various family offices are looking to diversify their investments.

“Investors have confidence in the proven forward-looking metrics of mature store profitability and new store EBITDA, which is why we have successfully raised the largest-ever 100% domestic financing for a privately held startup in the history of India. We are raising this Indian funding as the first step towards quickly becoming a fully Indian-owned company in the next financial year,” Zepto Chief told the news portal.

Family offices such as Motilal Oswal’s Raamdeo Agrawal, Manipal’s Ranjan Pai, Mankind Pharma, Cello and Bisleri are where Zepto raised its latest round of funding across multiple units.

With this $According to news reports, the company has a backing of Rs 2,500 crore and a current cash balance of $1.4 billion.