ZeptoExpress (Zepto), a Malaysian on-demand delivery service has raised its first undisclosed 7-figure sum venture capital (VC) fund from Ficus Venture Capital.
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. He’s also hoping to grow 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 Vulcan Post that they’ve only ever raised funds through angel investors to channel into growing the company organically in its early days. Starting out as ZeptoBike, the platform was mainly an on-demand delivery service to transport small packages, similar to Lalamove or GrabExpress.
Izzairi further explained that despite various offers from other VCs in the past, he couldn’t agree with any of the terms that were offered to him. “We tried our very best to self-sustain and ensure the company stays afloat without any external funding injections, only focusing on increasing our revenues and making profits,” he recounted.
“But now, we feel it is high time for us to get funding and expand our services and offerings beyond what we have currently been doing all these years with the right valuation and price.” Izzairi is confident that with the right guidance from Ficus, the company can accelerate its growth.
Shifting gears into an end-to-end logistics service
We last spoke to Zepto in 2020, when they had pivoted to start selling groceries online during MCO 1.0. Despite the service helping them achieve a sudden spike in revenue during the lockdown, the trend immediately plummeted after movement restrictions were lifted.
Though they’ve halted the service for the time being, Izzairi shared that this pivot was one of his proudest moments for the company during the pandemic. “We managed to set everything from ground zero within 3 days and kick off the new service in no time, which has tremendously increased our revenue by 10 times during the pandemic,” he said.
As online shopping has once again spiked with MCO 3.0 restricting movement, retail stores big and small must close and move online. To get their products to customers, they need a middleman to deliver, and Zepto is planning to fulfil that exact need.
Now with a 7-figure sum raised, Izzairi is planning to set up more mid-sized fulfilment hubs and expand Zepto’s coverage to more high density areas. These hubs will mostly be a place for Zepto’s team to perform sorting and zoning for parcels to be delivered within cities and interstate.
“We saw there was demand from the market, and since we were already doing last mile deliveries, we thought why not we venture into fulfilments as well? It’s a service that compliments our fleet and the entire process for a delivery,” explained Izzairi.
Zepto’s target now is to onboard more SMEs while the e-commerce growth is on an upward trend again. This end-to-end service will be offered in KL, Johor, Penang, and Ipoh, before expanding to Vietnam.
The team is choosing Vietnam as they’ve already been serving fulfilments for quite a number of Vietnamese companies that are in Malaysia. More so, the last-mile delivery in Vietnam has changed tremendously in a positive way over the last few years, according to Izzairi.
Since ZeptoExpress’ business model can be operated easily with the help of the software that we’ve built throughout the years and doesn’t require a huge team to operate it, we feel that Vietnam is a suitable country for us to step in. The cost for operating there is not high versus the potential of revenue compared to other countries.
Izzairi Yamin, co-founder of ZeptoExpress.
Featured Image Credit: Izzairi Yamin, co-founder of ZeptoExpress
