ZappFresh has maintained a more modest scale in comparison to its direct-to-consumer (D2C) meat delivery competitors like Licious and FreshToHome, who are often seen as the prominent players in the industry. Nevertheless, ZappFresh has not been at a disadvantage, as its consistent performance over the past two fiscal years clearly illustrates.
While Licious and FreshToHome have experienced substantial losses, ZappFresh has managed to maintain profitability throughout FY22 and FY23.
“We did INR 70 crore revenue in FY23,” said Deepanshu Manchanda, Founder and Chief Executive Officer of ZappFresh.
This essentially indicates that the operational revenue for FY23 remained unchanged from the INR 56 crore earnings recorded in FY22. Manchanda explained that the company’s focus on sustainable growth over the past two fiscal years, rather than aggressively pursuing expansion, was the key reason for this marginal growth.
Operating in the Delhi-NCR and Bengaluru regions, the company offers a range of fresh meat, seafood, and ready-to-cook products through its mobile app and website.
“We deliver around 4,500 orders on a daily basis with an average basket size of INR 600,” Manchanda added.
As expected, the acquisition of materials constituted the most significant cost category for ZappFresh in FY23, making up 40-50% of the total expenses, according to the founder. Meanwhile, employee benefits and advertising expenses each contributed 10% to the overall costs.
In addition, the company effectively managed its expenses in the preceding fiscal year and saw an increase in profits compared to FY22.
Manchanda revealed that the company’s FY23 profit amounted to approximately INR 3.5 crore. “…we are looking to end the ongoing fiscal with two-fold growth in profit after tax.”
The company, founded seven years ago, has accumulated over $9 million in funding thus far. The co-founders retain approximately 40% of the ownership stake, with SIDBI being the largest external stakeholder, holding 21%, according to data from TheKredible, a platform specializing in tracking startups and providing intelligence on them.
ZappFresh’s recent acquisition of Dr. Meat, valued at approximately $3 million, is expected to contribute significantly to the company’s growth.
Read More: ZappFresh bolsters growth strategy with acquisition of Dr. Meat, sets sights on Bengaluru market
“We are confident to hang around INR 200 crore in collection in the ongoing fiscal year,” added Manchanda.
As previously mentioned, ZappFresh’s competitors operate on a larger scale; however, they have incurred substantial losses. For instance, in FY22, FreshToHome reported revenue of INR 102 crore but also recorded a loss of INR 477 crore.
In FY22, Licious, which is backed by Temasek and is the sole unicorn in the D2C meat delivery sector, generated a revenue of INR 682 crore. However, during the same fiscal year, Licious incurred a loss of INR 855 crore. Both companies, Licious and FreshToHome, have not yet disclosed their financial figures for FY23.
