Zepto Bags Another $350 Mn From Domestic Investors

Continuing its funding spree, quick commerce major Zepto has raised another $350 Mn (about INR 2,950 Cr) in a round led by Motilal Oswal’s private wealth division.

The round also saw participation from domestic high-net-worth individuals (HNIs), family offices, and financial institutions, including Taparia Family Office, Mankind Pharma Family Office, RP Sanjiv Goenka Group, Cello Family Office. 

Besides, the likes of Haldiram Snacks Family Office, Sekhsaria Family Office, Kalyan Family Office, Happy Forgings Family Office, Mothers Recipe Family Office, celebrities Abhishek Bachchan and Sachin Tendulkar also pumped capital in the round. 

In a statement, Zepto said that the round was raised entirely from domestic investors. While it did not say how it plans to use the funds, the capital could likely be used for the expansion of 10-minute snacks delivery service, dark store network, and its fintech offerings. 

“When we started this venture, the risk appetite among domestic investors was limited – especially to trust 18-year-olds with their money. Today, we are humbled to have reached a place in India’s economic growth where we’ve not only fostered that trust but also spearheaded a fundraise of this magnitude, which will hopefully set a precedent for the startups that follow…,” said Zepto cofounder and CEO Aadit Palicha.

The development comes a week after reports surfaced that the quick commerce giant was looking to raise $300 Mn from domestic investors. At the time, it was reported that Indian shareholding in Zepto would likely increase to around 35% post the round, which would be raised at a valuation of $5 Bn. 

With this, the company has raised more than $1.3 Bn in the past few months. It closed a $665 Mn round in June at a valuation of $3.6 Bn and followed it up with another $340 Mn financing round at a valuation of $5 Bn in August.

The fundraise comes amid heightened competition in India’s burgeoning quick commerce space. 

While recently listed Swiggy has earmarked a big chunk of proceeds from the IPO for fueling its quick commerce vertical, Zomato-owned Blinkit too has rapidly scaled up its operations and product catalogue to meet the growing demand for 10-minute delivery. 

Zomato is also looking to raise INR 8,500 Cr via a qualified institutional placement. The company is likely to use at least a part of this to further expand Blinkit’s presence.

Besides, the launch of 10-minute food delivery services by these players has also intensified the competition, as startups are spending millions to cater to user demand for quick-to-prepare dishes. 

And this dogfight is not without a reason. A recent report claimed that the Indian quick commerce ecosystem saw sales surge by 280% in the last two years. 

Founded in July 2021 by Palicha and Kaivalya Vohra, Zepto claims to deliver groceries and other items within 10 minutes. With operations spanning 17 cities, Zepto claims to have more than 550 dark stores under its belt and processes more than 7 Lakh orders daily. It also claims to employ more than 56,000 delivery partners. 

Its gross merchandise volume (GMV) crossed the $1 Bn mark in the fiscal year 2023-24 (FY24), with nearly 75% of its dark stores achieving full earnings before interest, taxes, depreciation, and amortisation (EBITDA) positivity by May 2024. 

On top of that, Zepto is also eyeing an initial public offering (IPO) in the next couple of years and is in the process of shifting its base to India.

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