Zepto Raises $665 Mn At A Valuation Of $3.6 Bn To Double Dark Store Count

Quick commerce major Zepto has raised a funding of $665 Mn at a valuation of $3.6 Bn, more than double from its last valuation of $1.4 Bn.

The funding round was jointly led by existing investors Glade Brook, Nexus, and StepStone. Goodwater and Lachy Groom also participated in the round, while Avenir Growth, Lightspeed, Avra were the new investors who joined the unicorn’s captable.

Zepto plans to utilise the funds to double its dark store count to 700 by March 2025 from 350 currently.

In a statement, Zepto said its GMV has surpassed $1 Bn, with approximately 75% of its stores achieving full EBITDA positivity as of May 2024. Additionally, the company has reduced the time for its stores to achieve profitability from 23 months previously to just six months today, it added.

“This dynamic of stores turning profitable faster and faster has enabled Zepto to grow rapidly while simultaneously achieving near EBITDA positivity at a company level. We plan to continue operating with fiscal discipline as we scale from 350 stores to 700 stores by reinvesting the capital generated from mature stores back into the business. If we are able to achieve this while continuing to delight customers, I believe we will be ready to go public relatively soon,” Zepto cofounder and CEO Aadit Palicha said.

Zepto cofounder and CTO Kaivalya Vohra said the startup plans to hire top talent across engineering, product, growth, finance, operations, and category management.

Founded in 2021 by Palicha and Vohora, Zepto has grown rapidly on the back of increasing demand for quick 10-minute deliveries. Last year, Zepto became the first unicorn of 2023 after raising $200 Mn in its Series E funding round.

It is pertinent to note that Zepto is looking to shift its base to India and is eyeing a public listing in 2026.

The mega fundraise comes at a time when large funding rounds have become a rarity amid the ongoing funding winter. The fresh capital will help Zepto scale up its presence at a time when the competition in the quick commerce space is increasing rapidly.

Zepto competes against the likes of Zomato-backed Blinkit, Swiggy Instamart. Moreover, JioMart, the digital commerce arm of RIL’s retail subsidiary Reliance Retail, is likely to begin delivering groceries in select cities in under 30 minutes soon. Ecommerce giant Flipkart is also gearing up to enter the quick commerce space.

Recently, Zomato also said that it is planning to invest INR 300 Cr in Blinkit.

Meanwhile, Zepto’s revenue surged 14.3X to INR 2,024.3 Cr in FY23 from INR 140.7 Cr in the previous fiscal year. Net loss grew 3.4X year-on-year to INR 1,272.4 Cr in FY23.

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