Zepto Raises $665M, Valuation Soars to $3.6 billion.

Zepto, the quick commerce online grocery delivery app, has raised $665 million in its Series F round, boosting its valuation to $3.6 billion. The fresh funds, primarily from existing investors like Glade Brook, Nexus, and StepStone, were supplemented by new investors Avenir Growth, Lightspeed, and Avra.

Zepto’s co-founder, Aadit Palicha, took to social media to reflect on the company’s remarkable journey since its inception three years ago. Palicha, who, along with co-founder Kaivalya Vohra, dropped out of Stanford during the pandemic to start Zepto, expressed readiness to push the company’s valuation to $5 billion.

Reflecting on the past three years of building Zepto, he wrote on X.

Reflecting on the past 3 years of building Zepto: the story of 2 kids dropping out of college and starting a company that is worth 30,000 Crores in just 3 years is only possible in one country in 2024: India 🇮🇳

We are ready to dedicate ourselves to building Zepto into a… pic.twitter.com/aQGq5xGu0r

— Aadit Palicha (@aadit_palicha) June 22, 2024

Strong Investor Support

The $665 million raised was a complete primary round, with existing backers contributing the majority. Notably, DST Global, an early backer of Swiggy, emerged as the single largest new investor, contributing around $100 million.

Palicha and Vohra, 19 when they launched Zepto, grew up in Dubai and frequently visited Mumbai. Coming from business-oriented families, they started their venture early, a decision that has evidently paid off.

Zepto, which became a unicorn in August last year after a $200 million Series E round, has seen its valuation soar from $1.4 billion to $3.6 billion in this latest round. The company has raised over $1.2 billion to date. Zepto reports near EBITDA positivity and a 140 percent year-on-year growth, with an annualized gross merchandise value exceeding $1 billion. Approximately 75 percent of its stores are entirely EBITDA positive as of May 2024.

Competing in Quick Commerce

The substantial funding will help Zepto compete with rivals BlinkIt and Swiggy Instamart. Unlike the West, quick commerce operators in India claim to have found a sustainable model. Zepto’s revenue surged 14-fold to Rs 2,024 crore in FY23, although its losses widened to Rs 1,272 crore from Rs 390 crore the previous year.

This fundraiser also marks the formal launch of Avra Capital, a growth equity fund by Anu Hariharan, the former MD of Y Combinator Continuity. Zepto is Avra Capital’s first global investment.

Meanwhile, Walmart-owned Flipkart is gearing to launch its quick commerce service soon. Reports indicate that a significant portion of the $350 million raised from Google will be directed towards this venture.

Stay ahead of the curve and follow IndiaTechDesk on Facebook, Twitter and Linkedin for in-depth news of market trends, funding updates, and regulatory changes affecting startups in India.