Zepto’s cash burn surges to Rs 250 crore per month; also raises fresh funding of Rs 2,500 Cr

In the last two months, quick commerce platform Zepto’s cash burn has surged to more than Rs 250 crore. 

According to Moneycontrol, sources have said that Zepto’s cash burn was in the range of Rs 30-40 crore till May 2024. 

But it has grown 6X in the past three months and is expected to stay in the same range in November as well. 

Zepto CEO and co-founder Aadit Palicha told Moneycontrol, “(Over) 70 percent of our existing stores have hit full EBITDA profitability. The capital we are burning is primarily for the capex, working capital, and ops set up to launch 100s of new stores per quarter.”

He also added, “Although the investment is upfront, these stores have a better EBITDA trajectory than the older stores - giving us the conviction to invest in launching new stores, which is delivering 200%+ y-o-y growth on a base of 10s of thousands of crores of scale.”

Sources have also told the publication that the rise in this significant cash burn can be attributed to the rising investment in operations, digital marketing, and hiring. 

According to them, Zepto is spending approximately Rs 120 crore monthly in digital marketing. 

Another said that the brand is “giving hikes of up to 50-60 percent to poach talent.”

All of this combined with substantial discounts on its product listings are driving the cash burn up.

Also Read: Social Media Influencer Launches Libido-boosting Chocolate Brand, Sunny Leone Joins As Ambassador

Zepto Fresh Funding:

Amidst all of this, Zepto has raised a fresh primary round of funding from a group of family offices. It has raised Rs 2,500 crore ($300 million) from the likes of Motilal Oswal’s Raamdeo Agrawal, Manipal’s Ranjan Pai, and the family offices of Mankind Pharma, Cello and Bisleri. 

This has driven the quick commerce brand’s cash balance to $1.4 billion. 

Palicha also told Moneycontrol, “Investors are confident with the mature store profitability proven and the forward indicators of EBITDA for new stores, which is why we have successfully raised the largest ever 100 percent domestic financing for a private startup in Indian history.”

Also Read: Once Did Kitchen Duties For Rs 5k, Kashmiri Pandit Turns Hotelier - Clocks Rs 2.5 Cr/Year