Exclusive: Zepto Likely To Be 2023’s First Unicorn With $150 Mn Series E Funding

After a prolonged dry spell, the Indian startup ecosystem is about to welcome its first unicorn of 2023. Quick-commerce delivery startup Zepto is currently in advanced discussions to secure around $150 Mn in its upcoming Series E funding round, which would catapult its valuation to $1.3 Bn.

The funding round, which is likely to conclude in the next one month, is being led by StepStone Group, sources told Inc42. 

It must be noted that StepStone is an LP (limited partner) of Zepto’s existing backer – Nexus Venture Partners. 

“While StepStone is infusing around $60 Mn, Nexus Venture Partners will be pumping in around $40 Mn. The remaining amount will come from other existing investors,” the sources said. 

Besides Nexus Venture Partners, existing investors such as Glade Brook Capital and Lachy Groom will also be participating in the funding round. It will be an equity funding round with no debt component, as per the sources. 

Zepto refused to comment on Inc42’s queries on the matter. 

While India got 44 unicorns in 2021, the number fell sharply to 21 in 2022. With the latest funding round, Zepto will become the first Indian unicorn of 2023 after almost seven months since the start of the year. 

Founded in 2021 by Aadit Palicha and Kaivalya Vohora, Zepto entered the market by capitalising on the rising demand for quick commerce delivery following the outbreak of the Covid-19 pandemic. It quickly rose to fame on its promise of delivering groceries in 10 minutes and attracted interest from several investors.

The startup turned heads when it raised $60 Mn in a funding round from Glade Brook Capital, Nexus, and Y Combinator, among others, in 2021. Later, it raised $100 Mn in Series C round and last year bagged $200 Mn in its Series D round, led by Y Combinator’s Continuity Fund, at a valuation of around $900 Mn. 

Zepto reported a standalone net loss of INR 390.3 Cr in FY22, its first year of operations. Operating revenue stood at INR 142.3 Cr during the year. Zepto, which began operations in April 2021, incurred total expenses of INR 532.7 Cr in FY22. 

Zepto primarily competes against deep-pocketed players like Swiggy’s Instamart, Zomato-acquired Blinkit, and Reliance-backed Dunzo. While Swiggy last infused $700 Mn in Instamart in December 2021, Zomato acquired Blinkit for $568 Mn last year. However, Dunzo, which raised $240 Mn from Reliance Retail early last year, is facing a severe cash flow issue, forcing it layoff employees and withhold salaries of many others.