Launch · Commerce & Consumer Brands

Zepto adds platform fee, launches subscription pass

By Startup Enthusiast · 6 March 2024

What they do

Zepto introduces a Rs2 platform fee per order for select users, along with other charges like handling fees and surge fees

It launched Zepto Pass on 19 Feb 2024, priced at Rs149-299 per month but discounted to Rs19 for most customers

The fees and subscription aim to improve profitability, with Zepto targeting EBITDA positive in 2.5 quarters

Zepto has introduced a platform fee of Rs2 per order for select users.
It also charges handling fees of Rs5-20 per order depending on order size, location and time of day.
A late night handling fee of Rs15 applies for orders after 11pm in certain cases.
There is a small cart fee when the order is under Rs100.
A surge fee is charged during high demand periods.
On 19 February 2024, Zepto launched a membership programme called Zepto Pass.
Zepto Pass costs Rs149-299 per month, currently discounted to Rs19 for most customers.
Within one week of launch, 1 million users subscribed to Zepto Pass.

Zepto is the only standalone quick commerce firm in India, competing with Blinkit (Zomato-owned) and Swiggy Instamart.
Blinkit and Swiggy Instamart do not charge a platform fee on grocery orders, though Zomato and Swiggy charge one on food delivery.
A JM Financial note says customer fees like platform and handling fees are a driver of improving profitability for quick commerce.
Zepto aims to become EBITDA positive in the next 2.5 quarters, with monthly cashburn in single-digit million dollars.
The company plans an IPO by early 2025.

Zepto is a quick commerce platform that delivers groceries and essentials in minutes.
It operates in multiple Indian cities with a network of dark stores.
Its annualised gross merchandise value is over $1 billion.
Zepto has a market share of about 20% in Indian quick commerce, behind Blinkit (~40%) and Swiggy Instamart (37-39%).
It generates revenue from product sales, delivery fees, platform fees, handling fees, surge fees, and subscription fees.
Zepto Pass subscribers spend 30% more on the app after opting in.
Monthly retention improves by 10% for Zepto Pass subscribers.

StepStone Group (lead) — StepStone Group led Zepto's Series E round of $200M at a $1.4B valuation.
Nexus Ventures (existing) — Nexus Ventures is an existing investor in Zepto.

Product: A rapid-delivery app for groceries and everyday essentials.
Customers: Consumers ordering groceries and essentials online.
How it makes money: It earns from product margins, delivery fees, and order-value thresholds across its quick-commerce network.
What sets it apart: It was built as a quick-commerce native company from day one.
Operations: Operates dark-store based 10-minute delivery across multiple Indian cities.