Quick commerce unicorn Zepto to shift base from Mumbai to Bengaluru
Source: Business Standard
Flush with funds, quick commerce unicorn Zepto is looking to shift base from Powai in its home city of Mumbai to a larger office space in Bengaluru’s Sarjapur to account for its imminent new hires.
The company will continue to have an office in Mumbai, but its operations will largely be carried out through the new space in Bengaluru.
A Zepto spokesperson confirmed the development to Business Standard.
Though the company already has an office in Bengaluru, it is currently operating out of its larger office in Mumbai, in partnership with co-working space provider WeWork.
“The lease period with WeWork is ending in December. To continue to operate out of its office in Mumbai, the company would have to bear the housekeeping and management charges of the building,” said a person aware of the development.
Zepto currently has around 1,800 employees, and is planning to hire another 500 soon, CEO Aadit Palicha told Business Standard earlier.
“The team has outgrown the current office, and with new hires coming in, the company would need a bigger space,” the person cited above said.
Out of Zepto’s 1,800 employees, around 200 are operating remotely from across the country, while the remaining are split evenly across Mumbai and Bengaluru. Around half of Zepto’s leadership team, including co-founder Kaivalya Vohra and chief financial officer Ramesh Bafna, are also based in Bengaluru.
“Half of the technology team was already in Bengaluru, while most of the product and marketing teams are in Mumbai. The company wants the product and technology teams to work together out of a single office space,” said the source.
Zepto is in advanced stages of signing its new lease for a potential property in Bengaluru’s Sarjapur. While the deal is yet to be finalised, the company is expected to save a large chunk of money on rent. This is expected to offset the relocation costs for its employees, an expense which the company is bearing.
“It is up to the employees if they want to relocate or work remotely. Zepto is offering them the flexibility to do so,” the person cited above said.
The new office space in Bengaluru aside, Zepto is planning to find another office in Mumbai as well. How many employees will continue to operate out of Mumbai remains to be decided, based on the new lease agreements.
Zepto recently raised a massive $665 million series F funding round at a $3.6 billion valuation. The company is also looking to bolster its leadership ahead of its upcoming initial public offering (IPO) by hiring several senior-level employees across various categories, Business Standard had reported earlier.
Mumbai to Bengaluru
The decision of Zepto to move to Bengaluru again brings into focus the city losing its charm for founders due to high costs and infrastructure issues.
Mumbai has more than 100 startups at various stages. Some of the large ones include Dream11, upGrad, Nykaa, Purplle, Nazara, Shaadi.com, NoBroker, Good Glamm Group, GOQii and others.
The Tech Entrepreneurs Association of Mumbai (TEAM) said that Zepto’s move to Bengaluru just shows that the city can incubate and bring to scale a startup successfully.
“It is a strong testimony to Mumbai’s startup and tech culture that a company like Zepto was incubated, built, and grew to its current strength and market dominance in India. Zepto’s founder, Aadit, is also a founding member of TEAM and he continues to be a member and big supporter of our mission to ensure Mumbai remains the city of choice for companies at every stage,” said a statement from TEAM.
They however did not comment on Zepto’s decision. “Zepto’s decision to bring their teams under one roof is an internal company matter and as TEAM we are unable to comment on the same,” said the statement further.
TEAM has 46 founders as its members, including BillDesk, BookMyShow, Pharmeasy, Haptik, Dream11, and Nazara Technologies among others.
Overall, Mumbai has the highest number of DPIIT-registered startups in India, India’s top engineering colleges, and the fastest growing SaaS, consumer and gaming unicorns in Asia, demonstrating its vibrant and supportive startup environment.
Alok Kejriwal, CEO, Games2Win, who has been a native of Mumbai for 54-years and runs a successful company believes as startups have to think of product-market fit, founders should also think of founder-fit.
“It is also a fact that Mumbai is excellent in some things and not so good in some areas. Mumbai is absolutely perfect to start anything related to Bollywood. Every day the Bollywood industry sees a new entrepreneur. Businesses related to finance, real-estate, construction, textile are all native of Mumbai,” he told Business Standard.
“It also depends on what you want from the city. One of the best things for startups when choosing a location is to be closest to the city of consumption. The consumer fit for a business like Zepto is perhaps not in Mumbai. Because the city has a good network of kirana shops who deliver within 5-10 minutes. Bangalore, on the other hand, lacks such a network. Perhaps that is why they are moving,” said Kejriwal.
THE GREAT LEAP
Zepto scaling up while Mumbai taps out
> Zepto is leasing a larger office in Bengaluru’s Sarjapur for 500 new hires and to consolidate teams
> The move will reduce rent costs while maintaining an office in Mumbai
> Employees can choose to relocate or work remotely, with all relocation costs covered by Zepto
> The number of Mumbai-based employees will be determined by new lease agreements
First Published: Aug 06 2024 | 6:07 PM IST
