India’s quick commerce market is witnessing an unprecedented boom, fueled by continuous advancements by its key players. In a lightning-fast move, Zepto has secured a staggering $665 million in funding, more than doubling its valuation to $3.6 billion. The startup took only three years since its inception in 2021 to emerge as a formidable challenger to industry giants like Zomato’s Blinkit, Swiggy Instamart, and Tata Digital’s BigBasket.
It is interesting to note that approximately 40% of Zepto’s latest funding came from new investors, highlighting its growing appeal and market confidence. These new investors include DST Global, Avenir Growth Capital, Lightspeed Venture Partners and Avra. Concurrently, the funding round was spearheaded by existing investors Glade Brook Capital, StepStone Group, and Nexus Venture Partners. Some other existing investors, Goodwater Capital and Lachy Groom, also participated.
“We have executed fairly well and are the fastest-growing Indian company to hit a billion dollars in GMV (gross merchandise value) terms and we continue to grow at over 100% year-on-year… I think, if we didn’t execute regardless of what industry we were in, we would not have been able to successfully get this financing,” said Aadit Palicha.
Zepto Funding History
Zepto, founded by Aadit Palicha and Kaivalya Vohra, has raised a total of $1.2 billion so far. Its funding journey began with $700K in the Seed round in January 2021. This was followed by approximately $60 million raised in Series A/B in October 2021, $100 million in Series C in December 2021, and $200 million in Series D in May 2022.
In a significant milestone, Zepto achieved unicorn status in August 2023 by raising $235 million at a valuation of $1.4 billion.
The 10-minute delivery startup boasts a loyal customer base with a whopping 4.5 million subscribers enrolled in its Zepto Pass membership program.
The rapid growth and competitive dynamics in India’s quick commerce sector have sparked a flurry of funding activities among key players. Recently, Flipkart secured nearly $1 billion in funding from Walmart and Google, signalling its imminent entry into the quick delivery service segment.
Zomato has also announced a substantial investment of Rs 300 crore into Blinkit, aiming to strengthen its infrastructure and operational capacities.
In a separate development, Swiggy made headlines by filing confidential papers for a $1.2 billion initial public offering (IPO) with the Securities and Exchange Board of India (Sebi) in April. The upcoming Swiggy IPO is poised to intensify competition within India’s quick commerce and food delivery markets.
Zepto Future Plans
Looking ahead, Zepto aims to go public as early as next year, viewing the recent funding as a step towards strengthening its balance sheet for its IPO. The company is also in the process of relocating its headquarters back to India from Singapore, aligning with its IPO preparations that are already underway.
Zepto plans to leverage the fresh capital to significantly expand its footprint. By March 2025, it aims to double its dark store network from 350 to over 700, venturing into ten new cities beyond its current strongholds. This strategic expansion will not only solidify its presence in major metros but also tap into the burgeoning demand in non-metro areas.
Zepto also intends to increase its team size from 1,600 to more than 2,000 employees in the coming months, leveraging profitability from existing stores and cash generation to fuel expansion.
India’s quick commerce sector is witnessing a fascinating shift, with all major players extending their offerings beyond traditional groceries. Zepto is following the same trend. The company’s strategic initiatives include enlarging its dark stores to 4,000 square feet, an increase from their current size of 3,500 square feet.
Moreover, Zepto has significantly expanded its product range, now offering an impressive array of 10,000 SKUs in diverse categories such as electronics, beauty products, toys, and appliances.
Meanwhile, Zepto’s rival, Zomato-owned Blinkit, currently operates 526 dark stores and has ambitious plans to double this number to 1,000 in the coming months. Another rival, Swiggy Instamart, also operates more than 500 dark stores across India.
Now that Zepto has received fresh funding at a $3.6 billion valuation, the stage is set for a compelling battle among India’s quick commerce titans vying for market dominance. Consumers, however, stand to benefit from this fierce competition, enjoying ever-faster delivery times, wider product choices, and potentially lower prices.