Zepto, earning $1 billion in 90 days, projects 150% annual growth

Zepto co-founder Aadit Palicha told a gaggle of analysts and investors on Tuesday that the three-year-old Indian delivery startup is forecasting 150% growth over the subsequent 12 months, a remarkable performance that implies India’s fast-growing express commerce market shows no signs of slowing down.

Palicha shared these observations during a call organized by the investment bank. Participants included representatives from several outstanding investment firms, including Abu Dhabi Investment Authority, Temasek, GIC and Invesco, in accordance with materials reviewed by TechCrunch.

An organization spokesman contacted on Tuesday declined to comment.

Zepto’s annual sales run rate recently crossed $1.5 billion, Palicha told them, adding that a growth rate of around 150% would take sales to over $3.5 billion. Zepto competes with Zomato’s Blinkit, SoftBank-backed Swiggy Instamart and BigBasket, all of that are wooing customers with their 10-15-minute delivery services. BlinkIt’s current sales run rate is around $2 billion.

Fast-paced commerce is rapidly gaining popularity in India’s $1.1 trillion retail market. Zepto, BlinkIt, Swiggy and Tata-owned BigBasket BB Now are all on target to succeed in annual sales of greater than $6 billion, compared with overall e-commerce sales of about $50 billion. Online food market BigBasket, which delivers groceries to customers inside hours, said on Tuesday it was fully switching to fast-paced commerce.

India’s e-commerce market, dominated by Flipkart and Amazon India, is growing at about 11% to 12% annually, in accordance with industry data. By contrast, fast-paced commerce has grown by greater than 100% in each of the past three years.

Fast-trading firms are “clearly taking share” from larger e-commerce firms, said Rahul Malhotra, e-commerce analyst at Bernstein. Fast-trading “could account for 40-50% of e-comm (some categories) in the next three years, based on our checks, it currently accounts for 10-15% of the total e-comm segment,” Elara Capital said in a note.

E-commerce giants are taking note. Flipkart launched its fast-paced retail offering, called Flipkart Minutes, earlier this month. Amazon India, long skeptical of the model, can be considering launching its own fast-selling service already in the primary quarter of next 12 monthsAs reported by the Indian newspaper Economic Times on Wednesday.

Investors on Tuesday asked Palicha in regards to the potential for fast trading to expand beyond India’s dozen or so cities, since these apps currently operate mostly in large urban areas. “Fast trading is not a tier-one phenomenon,” Palicha said. “Our data clearly shows a huge opportunity in the tier 2/3, regardless of market sentiment.”

During the decision, he also confirmed that Zepto had raised $1 billion in the past 90 days, which he said will allow the corporate to expand more aggressively. Zepto counts Nexus Venture Partners, Lightspeed, Avra, YC Continuity, Contrary, and StepStone Group amongst its backers.

TechCrunch previously reported that Zepto, currently valued at $5 billion, was finalizing a $340 million funding round led by General Catalyst. The startup closed a $665 million funding round in June.