Zepto to shift to marketplace model, sets up new entity

Quick commerce company Zepto has set up a new entity Zepto Marketplace to rejig its operations from a B2B model to a marketplace model, according to people in the know. Zepto Marketplace was registered in October 2024, and the company’s operations will soon switch to the new model once the operational and regulatory nitty-gritty are sorted out, sources said. A mail query sent to the company did not elicit any response.

The shift, according to sources, will enable Zepto to have a greater hold on quality control and service. Zepto is also set to soon launch “Thor”-a SaaS inventory management platform to further streamline operations, they added. The development comes as Zepto prepares for a public listing within this year.

Zepto’s peers like Blinkit and Swiggy Instamart already follow a marketplace model. Under the current structure, Zepto licenses its brand name and operations to three companies: Geddit Convenience, Drogheria Sellers and Commodum Groceries. These three companies purchase their stock from Kiranakart Technologies Pvt Ltd and sell it to end consumers via the Zepto platform.

In essence, Kiranakart Technologies is a B2B company that sources and buys products directly from brands and sells them to Geddit Convenience, Drogheria Sellers and Commodum Groceries, Zepto’s three licensee companies. These companies then sell to the end consumer. For every sale that the three companies make using Zepto’s platform, they pay a licensing fee to the latter.

Thus, under the present B2B model, Zepto is the technology platform, serving as an intermediary between operators, sellers and delivery partners. Sellers list themselves on the platform while dark stores are franchise-managed and delivery partners are third-party rendering a gig.

Zepto reported a 120% increase in operating revenue to Rs 4,454 crore in FY24. The company also proposes to launch a separate app for Zepto Cafe, which is engaged in quick delivery of snacks and other food items.

Zepto’s valuation stands at $5 billion. In November 2024, it raised $350 million in a funding round that included investments from Indian HNIs, family offices, and leading financial institutions. With business growing rapidly, Zepto is looking to expand to over 50 cities by next quarter from about two dozen cities right now.

(Source: PTI)