Quick Commerce Unicorn Zepto Secures Another $31 Mn In Series E Round

Zepto Looking To Raise $650 Mn Funding At A Valuation Of $3.5 Bn

SUMMARY

Zepto raised an additional sum of $31.25 Mn in a Series E funding round from Goodwater Capital, Nexus Venture Partners

Additionally, angel investors such as Oliver and Lish Jung, and Mangum II LLC also participated in the round

In August, the Mumbai-based unicorn raised $200 Mn in its Series E funding round at a valuation of $1.4 Bn valuation, becoming the first unicorn of 2023

Mumbai-based quick commerce unicorn Zepto raised an additional sum of $31.25 Mn in a Series E funding round from Goodwater Capital, Nexus Venture Partners.

Additionally, angel investors such as Oliver and Lish Jung, and Mangum II LLC also participated in the round, according to the company’s filings with Singapore’s Accounting and Corporate Regulatory Authority (ACRA).

In August, the quick commerce unicorn Zepto raised $200 Mn in its Series E funding round at a valuation of $1.4 Bn valuation, becoming the first and only unicorn of 2023. The startup kept its plans for the newly raised funds under wraps, yet it disclosed its intention to pursue an initial public offering by 2025.

Founded in 2021 by Aadit Palicha and Kaivalya Vohora, Zepto seized the opportunity created by the increased demand for rapid ecommerce delivery during the Covid-19 pandemic. The startup gained attention when it secured $60 Mn in funding in November 2021, with investors including Glade Brook Capital, Nexus, and Y Combinator.

Zepto competes against the likes of Swiggy’s Instamart, Zomato-owned Blinkit, and Reliance-backed Dunzo.

According to industry experts, Zepto may need to raise funds approximately every 12-15 months to accelerate its revenue growth and remain competitive with players like Zomato’s Binkit, and Swiggy’s Instamart, as they benefit from a similar revenue mix advantage.

The recently turned unicorn saw its net loss surge 3.35X during the year ended March 31, 2023. The quick commerce startup reported a net loss of INR 1,272.4 Cr in the financial year 2022-23 (FY23), an increase of 226% from INR 390.3 Cr in the last financial year, as per the company’s claims.

Its revenue from operations ballooned 14.3X to INR 2,024.3 Cr in FY23 from INR 140.7 Cr in FY22. Total income, including other income, jumped to INR 2,077.6 Cr from INR 142.3 Cr in the last fiscal year.

Zepto is still experiencing increasing losses despite revenue growth which indicates its profit margins will not increase unless a substantial portion of the dark stores becomes profitable or it diversifies into other business verticals.