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Indian instant delivery unicorn Zepto grabs $665M at $3.6B valuation

Zepto founders
Picture credits: Zepto

Instant grocery delivery unicorn Zepto has raised $665 million in funding. This round doubles its valuation to $3.6 billion from $1.4 billion in less than a year when it raised $200 million

Who invested in Zepto?

This round was led by existing backer Nexus Venture Partners and its limited partner StepStone Group. The investment will make it Nexus’ largest investment to date. 

Also, it saw participation from existing investor Glade Brook Capital and new investors Avenir Growth, Lightspeed Venture Partners (which invested in CuspAI and BlinqIO), DST Global, which backed Mistral AI, and Avra Capital, an investment firm headed by Anu Hariharan, the co-founder and former managing director of Y Combinator’s growth fund. 

How will it use the investment?

The latest funding round is expected to help Zepto rapidly expand its dark stores’ network or warehouses where grocery and e-commerce items are stored, with the aim of doubling the store count to 700 by March 2025. Currently, there are 350 stores across the country. 

The company also claims to be nearing company-wide EBITDA profitability with its gross merchandise value (GMV) multiplying multi-fold on a year-on-year basis.

Investment amidst challenges

Zepto has closed this latest round and more than doubled its valuation while the industry faces challenges such as declined consumer trust. In recent times, there have been some incidents such as unhygienic or low-quality products being delivered to consumers, creating a backslash amidst consumers. However, the core promise of quick-commerce is rapid delivery, often within 15 minutes, which is why consumers are drawn to these services.

Recent additions to Zepto

Founded by Aadit Palicha and Kaivalya Vohra in 2021, the instant delivery company has introduced several new initiatives to keep its consumers hooked on its service and improve its margins. 

One such feature is Zepto Pass, its loyalty programme with monthly prices starting at ₹19. Launched in February this year, over a million customers signed up for it. Furthermore, the company is in plans to scale up Zepto Cafe, its quick snack and meal delivery option.

Talking about competitions in the Indian quick commerce space, Zepto competes with the likes of Zomato’s Blinkit, Swiggy’s Instamart, and Tata-backed BigBasket Now among others. 

What do we think about Zepto?

This funding underscores the company’s rapid growth and market potential in India’s competitive quick-commerce sector. By expanding its dark store network and nearing EBITDA profitability, Zepto is well-positioned to enhance its service offerings and consumer loyalty, despite industry challenges. Its innovative approach and strong investor backing highlight its promising future.

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