Zepto Eyes $300 Mn Funding As Quick Commerce Battle Intensifies

Quick commerce major Zepto is reportedly looking to raise $300 Mn (INR 2,532.7 Cr) from domestic investors, doubling its earlier planned amount.

As per an ET report, top Indian family offices and ultra-HNIs are expected to be participating in the funding round.

Last month Inc42 reported that the company was in talks to raise up to $150 Mn. The family offices of Manipal Group’s Ranjan Pai, Mankind Pharma’s Ramesh and Rajeev Juneja, and Cipla were reportedly considering joining the quick commerce major’s funding round.

This comes at a time when the company has raised over $1 Bn over the past few months.

In August, Zepto closed a $340 Mn financing round at a valuation of $5 Bn, while in June, it raised $665 Mn at a valuation of $3.6 Bn. 

Inc42 has reached out to the company. The story will be updated based on the responses.

Following this round, Indian shareholding in Zepto is expected to increase to around 35%, including the stakes held by founders Aadit Palicha and Kaivalya Vohra. The founders have also been granted an additional 1% equity each for meeting performance targets, the report added.

Bollywood star Amitabh Bachchan and former cricketer Sachin Tendulkar will also be joining the round.

Additionally, the family offices of Ravi Jaipuria (RJ Corp) and Harsh Goenka (RPG Group) are in discussions to join the round, along with the Motilal Oswal Group, which has increased its investment from $40 Mn to over $60 Mn.

“The round was oversubscribed, which is why they (Zepto) have increased the total offering. They will sell about 6% stake at the $5 Bn valuation,” a source told ET.

The development comes amid intense competition among quick commerce players. 

Quick commerce players have expanded operations and diversified their catalogue to meet growing consumer demand over the last six months. For instance, in the case of Blinkit, its gross order value (GOV) surged 130% to INR 4,923 Cr in Q1 FY25 from INR 2,140 Cr in the corresponding quarter last year. Sequentially, it increased by 22.2% from INR 4,027 Cr in Q4 FY24.

Currently, Blinkit operates 639 dark stores across the country, with the average daily GOV per store rising to INR 10 Lakh, compared to INR 6 Lakh from 383 stores previously. 

A report estimates that the quick commerce industry in India saw sales surge by 280% over the last two years.

Meanwhile, Zepto is also planning to launch Zepto Postpaid, entering the buy now, pay later (BNPL) segment for larger orders.

The company claims its GMV for FY24 has crossed $1 Bn, with about 75% of its stores achieving full EBITDA positivity by May 2024. The company is eyeing an IPO in the next couple of years and is in the process of redomiciling to India.