Quick commerce startup Zepto has raised $665 million (Rs 5,555 crore) in a fresh round of funding, nine months after its last fundraise, with its valuation shooting up by more than 2.57x.
Existing investors Glade Brook, Nexus, and StepStone co-led the round, with participation from existing investors Goodwater and Lachy Groom and new investors including investment firms Avenir, Lightspeed, and Avra, the fund of former Y Combinator managing director Anu Hariharan.
In the latest round, Zepto was valued at about $3.6 billion, up from $1.4 billion that it commanded in August last year.
The company, which has been on a rapid growth pace since its inception in 2021, plans to use the capital to further scale up its operations. Zepto plans to double its dark stores to over 700 by the end of the current financial year, it said in a release.
Zepto said it has achieved $1 billion in gross merchandise value, with three-fourths of its store operating on a positive EBITDA or earnings before interest, taxes, depreciation, and amortisation.
“This dynamic of stores turning profitable faster and faster has enabled Zepto to grow rapidly while simultaneously achieving near EBITDA positivity at a company level,” said Aadit Palicha, co-founder and chief executive of Zepto. “We plan to continue operating with fiscal discipline as we scale from 350 stores to 700 stores by reinvesting the capital generated from mature stores back into the business.”
Prior to this, the company had raised about $560 million in funding across multiple rounds. It had last raised $200 million as part of its Series E funding round led by global asset manager StepStone Group, making entry into the unicorn club with the deal valuing it at about $1.4 billion. Previously, it raised $200 million in its Series D funding round led by American technology startup accelerator Y Combinator’s Continuity Fund at a valuation of $900 million. At the time, it said it is planning to go public by 2025 as a profitable company.
“The most exciting part about this next phase of Zepto’s journey are the major new projects from launching new categories to expanding initiatives like Zepto Pass. To build out this roadmap, we plan to hire top talent across engineering, product, growth, finance, operations, and category management,” said Kaivalya Vohra, Co-founder and chief technology officer.
The investment also marks formal launch of Avra Capital, which will make growth capital investments. “We are thrilled to partner with Zepto once more, this time through Avra, marking our first global investment. Zepto may appear to be a mere 10-minute quick commerce company at first glance, but they are transforming Indian e-commerce by creating the 'Hyperlocal Amazon,' combining affordable prices with local convenience," said Hariharan.
Founded by Vohra and Aadit Palicha, Zepto runs a network of ‘cloud stores’ or micro-warehouses from where it provides the home delivery of groceries and essentials within a few minutes. The three-year-old startup operates in the quick commerce market, and pits against the likes of Swiggy’s Instamart and Zomato’s Blinkit.
