As cheap capital becomes unavailable, can the cash-guzzling startups that put groceries on people's doorsteps in under 20-minutes survive?
In its earnings call last week, Zomato said, in not so many words, that it would scale back its instant delivery aspirations. Just a year ago, quick commerce, which aims to put groceries on people’s doorsteps in less than 20 minutes, was one of the hottest areas of VC (venture capital) investment. It attracted $12-13 billion in funding, globally, in just one year.
In India, Zepto, a year-old-startup founded by two 19-year-old Stanford dropouts, raised a total of $360 million (roughly Rs2,754 crore), catapulting its valuation to $900 million in record time. Dunzo Daily, another quick commerce player, received a $200 million (Rs1,488 crore) investment from Reliance Retail in return for a 25.8 percent stake in January. Around the same time, Swiggy, the food delivery behemoth, also raised $700 million (Rs5,225 crore) in fresh funding led by US-based investment firm Invesco to bolster Instamart, its instant grocery delivery service.