Zepto Raises $340M, Valuation Hits $5B in Latest Round

Quick commerce startup Zepto has raised $340 million in a follow-on financing round led by General Catalyst, pushing its valuation to $5 billion and involving new investors like Dragon Fund and Epiq Capital; highlights the growing interest in quick commerce within India, as the startup plans to double its dark stores and continue reshaping the market.

Existing investors StepStone, Lightspeed, DST, and Contrary increased their stakes. Additionally, Zepto aims to strengthen its presence in metro cities, where the demand for instant deliveries continues to surge.

Zepto’s latest funding comes just two months after it raised $665 million in a pre-IPO round, showing continued investor confidence. With this fresh capital, the Mumbai-based company plans to double its dark stores to 700 by March 2025 and expand into new markets, including Nasik, Chandigarh, Vizag, and Ahmedabad.

Co-founder and CEO Aadit Palicha emphasized the strategic importance of this financing round, stating, “The opportunity to bring on a lead investor like Neeraj Arora from General Catalyst was one we couldn’t pass up. Strengthening our balance sheet is crucial as we continue to deliver robust growth and operating leverage.”

Aadit Palicha said the new round will enable the firm to strengthen its balance sheet as it gears up to deliver “robust growth and operating leverage.”

Zepto, Competitive Landscape in Quick Commerce

The quick commerce sector in India is heating up, with Zepto competing against industry giants like Flipkart, Tata’s BigBasket, and Zomato-owned Blinkit. Blinkit leads the market, followed by Swiggy Instamart, Zepto, and BigBasket.

As Zepto scales its operations, the company plans to leverage its growing network of dark stores to deliver over 10,000 products across various categories within 10 minutes, serving millions of customers nationwide.

“While these recent financings reflect strong confidence in Zepto’s performance to date, we recognize there is still a lot of execution ahead of us to fulfill our ambition of building a world-class internet company out of India. At Zepto, we genuinely feel we are just at the beginning of our journey,” Palicha said.

Financial Performance and Market Position

Zepto is nearing EBITDA positivity, reporting 140 percent year-on-year growth and an annualized gross merchandise value (GMV) exceeding $1 billion (Rs 8,300 crore). Approximately 75 percent of its stores are entirely EBITDA positive, reflecting strong operational efficiency.

Despite these gains, Zepto’s losses widened to INR 1,272 crore in FY23, even as its revenue surged 14-fold to INR 2,024 crore. The company’s rapid expansion and aggressive market positioning highlight the fierce competition in India’s quick commerce space.

As Zepto and other quick commerce players expand, traditional mom-and-pop stores, or kiranas, are under pressure. The All India Consumer Products Distributors Federation (AICPDF) recently expressed concerns to India’s trade and industry minister about the impact of quick commerce on small retailers. The federation warned that the rapid growth of instant delivery services could undermine the viability of kiranas, which remain a cornerstone of India’s retail landscape.

Zepto’s $340 million funding round marks a significant milestone in its growth trajectory, solidifying its position in India’s competitive quick commerce market. With plans for an initial public offering next year, Zepto is poised to continue reshaping the country’s e-commerce sector.

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