In a major move signalling confidence in India’s booming quick commerce sector, Motilal Oswal Financial Services (MOFS) has announced a ₹400 crore investment in Zepto, one of the country’s fastest-growing instant grocery delivery platforms. This funding injection is expected to strengthen Zepto’s competitive position against rivals like Blinkit, Swiggy Instamart, and BigBasket Now, as it pushes for deeper market penetration and operational efficiency.
According to industry observers, this investment not only underscores the growing investor appetite for quick commerce but also reaffirms the sector’s resilience despite challenges around profitability and operational costs.
Zepto’s Rise in India’s Quick Commerce Landscape
Founded in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto has rapidly transformed from a Mumbai-based experiment to a nationwide player delivering groceries, household items, and essential goods in under 10 minutes in several cities.
The platform has leveraged:
- Hyperlocal dark stores strategically located near high-demand zones.
- AI-driven inventory management to minimise wastage.
- High-speed logistics partnerships for quick deliveries.
Its promise of speed, convenience, and product variety has struck a chord with India’s urban millennials and Gen Z consumers, leading to triple-digit year-on-year growth.
MOFS Investment – A Strategic Boost
Motilal Oswal Financial Services’ ₹400 crore infusion will be used for:
- Expanding Zepto’s dark store network to cover more Tier-1 and Tier-2 cities.
- Investing in technology upgrades to optimise delivery routes and improve order accuracy.
- Strengthening supply chain resilience by building stronger vendor partnerships.
- Scaling up marketing campaigns to enhance brand recall in competitive markets.
India’s Quick Commerce Market – Growth Indicators
| Year | Market Size (₹ Cr) | YoY Growth (%) | Penetration in Urban Households (%) |
|---|---|---|---|
| 2021 | 2,500 | – | 3 |
| 2022 | 5,800 | 132 | 7 |
| 2023 | 10,100 | 74 | 11 |
| 2024* | 15,500 | 53 | 16 |
*Projected
With an expected CAGR of over 45% between 2024-2028, the quick commerce industry is set to become a ₹50,000 crore market by the end of the decade.
Competitive Landscape – Who’s Leading the Race?
| Company | Parent Company | Cities Covered | Avg. Delivery Time | Funding Raised (₹ Cr) |
|---|---|---|---|---|
| Blinkit | Zomato | 27+ | 10-12 min | 9,500 |
| Zepto | Independent | 20+ | 7-10 min | 4,200 (incl. MOFS) |
| Swiggy Instamart | Swiggy | 25+ | 12-15 min | Part of $3.6B funding |
| BigBasket Now | Tata Digital | 20+ | 15-20 min | 5,000 |
Zepto’s aggressive expansion and record delivery speeds have made it a formidable challenger to incumbents.
Why Investors Are Betting on Quick Commerce
Despite debates around unit economics, investors remain bullish due to:
- High customer retention rates once delivery habits are established.
- Opportunities for cross-selling and premium product lines.
- Increasing smartphone and internet penetration in India.
- Rising disposable incomes in urban centres.
MOFS’ investment in Zepto aligns with this long-term growth potential, with expectations that improved efficiency and scale will eventually lead to profitability.
Technology as the Backbone of Growth
Zepto plans to channel a significant portion of the new funding into:
- AI-based demand forecasting to optimise stock levels.
- Real-time route optimisation algorithms to cut delivery times.
- Customer data analytics to personalise offers and improve retention.
- Sustainable packaging solutions to meet environmental goals.
Profitability – The Next Big Challenge
While quick commerce platforms have captured consumer attention, the industry still faces thin margins due to:
- High last-mile delivery costs.
- Intense price competition with frequent discounts.
- Significant capex in setting up and maintaining dark stores.
Industry experts note that economies of scale, combined with higher average order values, will be key to sustainable profitability.
Consumer Behaviour Shifts
Post-pandemic India has witnessed a dramatic change in shopping habits:
- Increased preference for instant gratification in grocery delivery.
- Shift from weekly bulk orders to multiple small daily orders.
- Growing willingness to pay delivery fees for speed and convenience.
Zepto’s strategy taps directly into this behavioural shift, offering time savings as the primary value proposition.
What This Means for MOFS
For Motilal Oswal Financial Services, this investment is more than just a financial bet — it’s a strategic play to be part of one of India’s most rapidly growing consumer segments.
The deal is expected to:
- Diversify MOFS’ investment portfolio.
- Give it a foothold in digital-first retail businesses.
- Potentially deliver high returns if Zepto maintains growth momentum and reaches profitability faster than rivals.
Future Outlook – The Road Ahead for Zepto
With the fresh funding, Zepto is likely to:
- Enter 10+ new cities within the next year.
- Launch premium grocery and fresh produce verticals.
- Explore subscription models for loyal customers.
- Introduce AI-powered voice ordering for ease of use.
If executed well, these moves could push Zepto into a leadership position in the quick commerce space by 2026.
Disclaimer: This article is intended for informational purposes only and does not constitute investment advice. Readers are advised to conduct their own research or consult a financial advisor before making investment decisions.
