Zepto scores $665mn as funds ride Q-comm wave

MUMBAI: Zepto has raised $665 million in fresh funding round at a valuation of $3.6 billion underlining growing investor appetite for the quick commerce segment. The investment comes less than a year after the Mumbai-based firm pocketed $235 million from investors at a valuation of $1.4 billion, joining the league of unicorn startups.
The funding led by existing backers Glade Brook Capital, Nexus Venture Partners and StepStone Group also saw new investors Avenir, Lightspeed and Avra join the startup’s cap table.The investment will boost the startup’s balance sheet as it aims for a public listing in 2025, co-founder & CEO Aadit Palicha told TOI.
“We want to have a healthy balance sheet going into the IPO. We do not have any intent to spend the capital needlessly. The ambition to go for an IPO is within 2025 but it would depend on where the capital markets are at that time,” Palicha said.

The quick commerce space has been growing in India, helped by demand from millennials and GenZs, many of whom often do not make planned purchases and end up ordering several times a month from platforms like Zepto which offer doorstep deliveries in 10-15 minutes. Zepto competes with Zomato’s Blinkit, Swiggy Instamart and Tata’s BigBasket in the market, which has quickly expanded beyond groceries. Currently, Blinkit leads the space with a 40-45% market share, analysts said.
The funding for Zepto comes at a time when players like Walmart’s Flipkart and Reliance’s JioMart are set to enter the space, intensifying competition. The funding also indicates a revival of late-stage deals in the startup space where flow of large investments have been tepid.
“We are getting this financing because we have executed quite well. We have been able to grow our sales and are quite close to overall ebitda break-even,” Palicha said. Ebitda refers to earnings before interest, taxes, depreciation, and amortisation. Zepto claimed that its gross merchandise value (or the value of goods sold on its platform) stood at $1 billion in FY24.
The startup is now looking to expand into about 10 cities with launches planned in Jaipur, Chandigarh, Ahmedabad and Coimbatore in about a couple of months. Besides, it will work on expanding selection of products on the platform and take its dark store count to 700 from 350 by March 2025.
“About 75% of our stores are generating profits. We will keep reinvesting the profits we are making from our matured stores back into the business,” said Palicha.