siliconindia | | December 20218In FOCUSZEPTO, A 10-MINUTE GROCERY DELIVERY APP IN INDIA, SECURES $100 MILLIONBY si TEAMZepto, a Mumbai-based startup that drives a 10-minute instant grocery delivery service, has more than doubled its valuation to $570 million from $225 million less than two months ago as it expands into newer cities. Y Combinator's Continuity Fund led the $100 million Series C round in Zepto, the two said Monday. Glade Brook, Nexus, Breyer Capital, Lachy Groom, Global Founders Capital and Contrary Capital also participated in the round, which brings its to-date secure to $160 million.The startup, founded by two 19-year-old entrepreneurs who left Stanford last year, came out of stealth mode in November. But long before it began talking about the business, Zepto had captured immense interest from the local startup community as people began voicing their opinion about the business.Zepto, whose name playfully uses a mathematical term to explain the business, offers a 10-minute grocery delivery service, a category that has become red hot in several parts of the world in recent quarters. Heavily-backed players Swiggy and BlinkIt (formerly known as Grofers) have also joined the instant grocery delivery business in recent months.But neither of them had opted in for this business until Zepto arrived and aggressively started to win customers. Zepto's arrival in the scene, too, was serendipitous. Aadit Palicha and Kaivalya Vohra had came back to India for a break shortly before the pandemic engulfed the nation.The teenagers, who previously collaborated on a number of projects, consisting of a ride-hailing commute app for school kids, suddenly found themselves locked in their houses in Mumbai. As the pandemic raged, the two struggled to get their grocery supplies even as grocery deliveries, categorized as essential by the local government, was still permitted in much of the nation."We felt that the online play of the Indian grocery delivery space, which is one of the world's largest, was grappling with some gross execution errors," Aadit told in an earlier interview. In an interview last week, Palicha said the startup is overwhelmed with the support and excitement it is seeing from the customers, but it doesn't want to 'become complacent'."We are somewhat overly critical of ourselves and hold ourselves to very high standards. People are happy that they are getting their deliveries in 10 minutes or less, but can we continue to focus on scaling our SKUs and improving our unit economics?" he stated. (But at the same time, Zepto is cautious about keeping its employees and delivery partners happy, he said, pointing to the retention and internal feedback).Kaivalya said that its month-on-month buyer retention is 65 percent and has set-up a network of micro-warehouses, each of which has a capacity to do over 2,500 orders a day.At stake is India's e-grocery market that is estimated to be worth $25 billion by 2025, as per a note from Sanford C. Bernstein. "Online grocery penetration is expected to reach ~3-5 percent, by 2025 from less than one percent today. Long-term structural drivers remain strong: rising income and affluence, We are somewhat overly critical of ourselves and hold ourselves to very high standards
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