Flush with funds, fast-paced commerce unicorn Zepto is looking to shift its base from Powai in its hometown of Mumbai to a larger office space in Sarjapur, Bengaluru, to accommodate its impending new hires.
The company will continue to have an office in Mumbai, but its operations will largely be conducted through the new space in Bengaluru.
A Zepto spokesperson confirmed the development to Business Standard.
While the company already has an office in Bengaluru, it currently operates from its larger office in Mumbai, in partnership with co-working space provider WeWork.
“The lease period with WeWork ends in December. To continue operating from its Mumbai office, the company would have to bear the costs of cleaning and managing the building,” said a person familiar with the situation.
Zepto currently has around 1,800 employees and plans to hire another 500 soon, CEO Aadit Palicha previously told Business Standard.
“The team has outgrown the current office and with the arrival of new hires, the company will need a larger space,” the person cited above said.
Of Zepto’s 1,800 employees, around 200 work remotely from across the country, while the rest are split equally between Mumbai and Bengaluru. About half of Zepto’s management team, including co-founder Kaivalya Vohra and CFO 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 in a single office space,” the source said.
Zepto is in an advanced stage of signing a new lease for a potential property in Sarjapur, Bengaluru. While the deal is yet to be finalised, the company is expected to save a significant amount of money on rent. This is expected to offset the relocation costs of its employees, an expense that the company is bearing.
“It is up to employees whether they want to move or work remotely. Zepto offers them the flexibility to do so,” the person cited above said.
In addition to the new offices in Bengaluru, Zepto is also planning to open another office in Mumbai. It is yet to be decided how many employees will continue to work in Mumbai, based on the new lease agreements.
Zepto recently raised a massive $665 million Series F funding round at a valuation of $3.6 billion. The company is also looking to strengthen its leadership ahead of its upcoming initial public offering (IPO) by hiring several senior employees across various categories, Business Standard reported earlier.
From Bombay to Bangalore
Zepto’s decision to move to Bengaluru once again highlights how the city is losing its charm for founders due to high costs and infrastructure issues.
There are over 100 startups in Mumbai at various stages. Some of the notable ones are Dream11, upGrad, Nykaa, Purplle, Nazara, Shaadi.com, NoBroker, Good Glamm Group, GOQii and others.
The Technology Entrepreneurs Association of Mumbai (TEAM) said Zepto’s move to Bengaluru proves that the city can successfully incubate and scale a startup.
“It is a strong testament to Mumbai’s tech and startup culture that a company like Zepto has been incubated, built and grown to its current strength and market dominance in India. Zepto’s founder Aadit is also a founding member of TEAM and remains a member and strong supporter of our mission to ensure that Mumbai remains the city of choice for businesses at all stages,” said a statement from TEAM.
However, they did not comment on Zepto’s decision. “Zepto’s decision to bring its teams together under one roof is an internal company matter and as a TEAM we cannot comment on it,” the statement added.
TEAM has 46 founders as members including BillDesk, BookMyShow, Pharmeasy, Haptik, Dream11, and Nazara Technologies among others.
Overall, Mumbai has the highest number of DPIIT-registered startups in India, the top engineering schools in India, and the fastest-growing SaaS, consumer, and gaming unicorns in Asia, demonstrating its vibrant and supportive startup environment.
“Going forward, given the high demand for construction and living in Mumbai and the resulting real estate and living costs, TEAM is working towards ensuring collaborative solutions on this matter as an important area of improvement to further support the ecosystem,” TEAM’s statement said.
Alok Kejriwal, CEO of Games2Win, a 54-year-old Mumbai native who runs a successful company, believes that just as startups need to think about product-market fit, founders should also think about founder-to-founder fit.
“It is also a fact that Mumbai is great in some things and not so good in other areas. Mumbai is absolutely perfect for starting anything related to Bollywood. Every day the Bollywood industry sees a new entrepreneur. Businesses related to finance, real estate, construction and textiles are all originating from 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 as close to the consumer city as possible. The right consumer for a business like Zepto may not be in Mumbai because the city has a good network of kirana stores that deliver within 5-10 minutes. Bangalore, on the other hand, lacks such a network. Perhaps that is why they are moving,” Kejriwal said.
THE BIG LEAP
Zepto grows as Mumbai runs out of resources
> Zepto is renting a larger office in Sarjapur, Bengaluru, for 500 new hires and to consolidate teams
> The move will reduce rental costs and maintain an office in Mumbai
> Employees can choose to relocate or work remotely, with all relocation costs covered by Zepto
> The number of employees based in Mumbai will be determined through new lease agreements.
First published: August 6, 2024 | 6:07 pm IS
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