Qcom to create 10x more Mamaearths, Boats in 3-4 years

AADIT PALICHA, co-founder and chief executive officer of quick commerce firm Zepto, speaks to Aryaman Gupta and Shivani Shinde in an interview about the capex plans, slowdown in FMCG sector, and predatory pricing. Edited excerpts:

- AADIT PALICHA

What is making investors queue up to invest in Zepto?

Earlier this financial year, we resoundingly proved the unit economics of our model. We turned around about 70 per cent of our dark stores to be fully earnings before interest, taxes, depreciation and amortisation (Ebitda) free cash flow positive, including all back-end supply chain and software costs.

Those stores are also turning free cash flow positive faster—now in eight months, down from 23 months earlier. From a return on equity perspective, it used to take us about ₹3.9 crore in capex and operating burn for a store to turn profitable. Now it only takes ₹1.5 crore. So, we've been able to turn our stores profitable rapidly, even as we scaled from zero to $1 billion (GMV) in two and a half years. This was seven months ago.

Seeing this trajectory, our investors urged us to invest in the business, which is why we were able to raise over $1 billion pretty quickly. We then decided to go all out in expanding our dark stores aggressively. Since April-May, we've been multiplying our dark store count, and from the base of $1 billion (GMV), we have grown well over twofold in a short period.