With the battle for dominance in India’s quick commerce space, industry giants like Zomato and Zepto have locked horns over their financial sustainability. On Tuesday, Zepto founder Aadit Palicha hit back at Zomato CEO Deepinder Goyal over his statement claiming that the 10-minute delivery concept is burning cash worth Rs 5,000 crore per quarter.
Of this, Zepto accounts for more than half of the cash burn which is around over Rs 2,500 crore quarterly, Goyal told The Economic Times in an interview on March 3. “…..compared to this, we are burning very low numbers. Last quarter, Blinkit burned around Rs 35 crore per month on an average,” he told the news publication.
Calling Goyal’s statement ‘verifiably untrue’, Zepto CEO said the picture will be clear if people look at its publicly available financial statements. “I know Deepinder, and I know he has only good intentions; this quote could have been taken out of context or said as an honest mistake,” said Palicha in a LinkedIn post.
Palicha asserted that he “deeply respect” Zomato CEO as an entrepreneur. “I was 5 years old when Deepinder started Zomato and he has become a role model for the Indian start-up ecosystem. I have personally read all of his blogs and it’s a privilege to learn from and compete with Zomato. Our genuine intention is to build the Indian start-up ecosystem together in good faith,” he added.
Earlier, industry experts told ET that Indian quick commerce companies including new entrants are burning cash to nearly Rs 1,300-Rs 1,500 crore on monthly basis. The number reveals how rapidly a company spends its money before generating positive cash flow.
The quick commerce giants like Blinkit, Swiggy Instamart, and Zepto have been spending on expansion to stand strong and face the heated competition. Blinkit opened new 216 stores and Instamart setting up 96 at various locations. They even brought heavy discounts to attract customers and added more product categories like clothing, personal electronics, beauty, fashion, among others.
On the other hand, the IPO-bound Zepto has also expanded its network in tier 2 cities, and currently operates over 600 dark stores across the country. Reportedly, Zepto CEO Aadit Palicha has plans to increase the dark store number to 1,200 by March 2025.
