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Zepto, a 10-minute delivery app, raises $665M at $3.6B valuation

Published

2 years ago

June 21, 2024

Zepto, a 10-minute delivery app, raises $665 million at $3.6 billion valuation

Zepto Raises $665 Million in Funding Round

Zepto has secured a significant $665 million in a recent funding round, marking a substantial increase in its valuation to $3.6 billion from $1.4 billion within a year. The Mumbai-based startup is intensifying its efforts to dominate the competitive quick commerce market in India.

Specializing in delivering a wide range of products from groceries to electronics to customers in urban Indian cities quickly, Zepto has found success in the rapid-delivery model, a stark contrast to the struggles faced by similar startups in developed markets.

The “highly-oversubscribed” Series F round was co-led by Glade Brook, Nexus, and StepStone Group, with participation from Avenir, Lightspeed, Avra, Goodwater, Lachy Groom, and Contrary, among others. Notably, DST Global, an early investor in Swiggy, also played a key role in the funding round.

Competing with BlinkIt (owned by Zomato) and Swiggy’s Instamart in the quick commerce sector, Zepto has strategically established numerous dark stores in urban India to facilitate quick order fulfillment within minutes.

With plans to expand its dark store network to over 700 by 2025, Zepto has reported a 140% increase in revenue compared to the previous year. The company’s annualized gross merchandise value (GMV) is expected to surpass $1 billion, with a growing network of delivery partners.

Zepto’s efficiency and scale have led to a significant portion of its dark stores becoming EBITDA positive, demonstrating improved profitability timelines.

The success of quick commerce firms in India has defied expectations, with customers embracing hyper-local purchasing habits. Zepto’s co-founder and CEO, Aadit Palicha, highlighted the unique appeal of quick commerce in India, emphasizing the convenience it offers to consumers.

Expanding beyond groceries, quick commerce startups in India are venturing into delivering high-ticket items like smartphones and gaming consoles within minutes, catering to diverse customer needs.

While Zepto offers electronics accessories, it remains focused on lower-stake purchases like household appliances, toys, beauty products, and more. The startup’s expansion plans include entering smaller cities to address unmet customer demands.

Anticipating a potential IPO in the near future, Zepto has garnered attention from investors like Avenir, who see its disruptive potential in the Indian retail landscape.

With a vast addressable market in India’s top cities, quick commerce companies like Zepto are poised to challenge established e-commerce players and reshape the retail landscape.