This funding comes 4 years after Zepto’s launch in 2017, where co-founder Izzairi Yamin is now looking to expand beyond last-mile deliveries. It also hopes to expand Zepto’s coverage to more locations in Malaysia and eventually Vietnam.
Growing independently for 4 years
Ficus Venture Capital (Ficus) is a local private company that brands itself as the first Shariah-compliant VC in the region. The firm focuses on growth investments to support early stage tech startups in the ASEAN region.
Prior to this funding, Zepto told the Vulcan Post that they had only raised funds through angel investors to funnel them into the organic growth of the company in its early days. Starting out as ZeptoBike, the platform was primarily an on-demand delivery service for transporting small packages, similar to Lalamove or GrabExpress.
Izzairi further explained that despite various offers from other venture capitalists in the past, he could not agree to any of the terms that were offered to him. “We did everything we could to support ourselves and make sure the company stays afloat without injections of external funds, focusing solely on increasing our revenue and making a profit,” he said.
“But now, we believe it is time for us to obtain financing and expand our services and offerings beyond what we have been doing all these years with the correct valuation and price.” Izzairi is confident that with the proper guidance from Ficus, the company can accelerate its growth.
Gear shift towards end-to-end logistics service
We last spoke to Zepto in 2020, when they started selling groceries online during MCO 1.0. Even though the service helped them achieve a surge in revenue during the shutdown, the trend plummeted immediately after movement restrictions were lifted.
Although they stopped the service for the time being, Izzairi shared that this turnaround was one of his proudest moments for the company during the pandemic. “We were able to set everything up from ground zero in 3 days and launch the new service in a short time, which has vastly increased our revenue by 10 times during the pandemic,” he said.
As online shopping has exploded once again with MCO 3.0 restricting movement, retail stores large and small must close and move online. To get their products to customers, they need a middleman to deliver them, and Zepto plans to meet that exact need.
Now, with a 7-figure sum raised, Izzairi plans to establish more medium-sized fulfillment centers and expand Zepto’s coverage to higher-density areas. These centers will primarily be a place for the Zepto team to sort and zoning packages to be delivered within cities and the interstate.
“We saw that there was market demand and, since we were already doing last-mile deliveries, we thought why not venture into compliance as well? It is a service that complements our fleet and the entire delivery process ”, explained Izzairi.
Zepto’s goal now is to bring in more SMEs, while e-commerce growth is trending up again. This end-to-end service will be offered in KL, Johor, Penang and Ipoh, before expanding to Vietnam.
The team is choosing Vietnam because they have already been meeting a large number of Vietnamese companies that are located in Malaysia. Furthermore, last mile delivery in Vietnam has changed tremendously in a positive way in recent years, according to Izzairi.
Since the ZeptoExpress business model can be easily operated with the help of the software that we have built over the years and does not require a large team to operate it, we believe that Vietnam is a suitable country for us to step in. the operating cost is not high compared to the revenue potential compared to other countries.
Izzairi Yamin, co-founder of ZeptoExpress.
Featured Image Credit: Izzairi Yamin, Co-Founder of ZeptoExpress