Zepto breaks India's unicorn drought by raising $200mn at $1.4bn
What's the story
Quick-commerce start-up Zepto has become India's first unicorn of 2023. It secured $200 million in a Series E funding round, achieving a $1.4 billion valuation.
The round, led by US-based StepStone Group and featuring participation from Goodwater Capital and existing investors, ends an 11-month unicorn drought in India.
Zepto's unicorn status, the first in the country since Molbio Diagnostics in September 2022, is a significant boost to India's start-up scene.
Details
Zepto is on track to become EBITDA-positive in 12 months
The funding success of Zepto comes amid a challenging environment for Indian start-ups, with funding falling 77% YoY in the first seven months of 2023.
Currently ranking third in order volumes among its competitors, Zepto has successfully reduced its monthly cash burn and is on track to become EBITDA-positive within the next 12 months.
Zepto, which competes with platforms like Blinkit, Swiggy Instamart, Dunzo, and Tata's BigBasket, plans to engage more with India-centric investors moving forward.
What Next?
Zepto is targeting a market debut in 2025
Zepto has its eyes set on an initial public offering (IPO). The company plans to conduct a pre-IPO funding round when it is EBITDA-positive.
The now-concluded Series E funding round is the company's "last growth equity round," said co-founder Aadit Palicha.
The $200 million investment will be used to bolster the company's balance sheet, as most of the capital from the previous round remains unused.
Zepto's IPO is likely to happen in the first half of 2025.
Founders
Zepto founders are Stanford University dropouts
Mumbai-based Zepto was founded in 2021 by Palicha and Kaivalya Vohra.
The childhood friends, who grew up in Dubai, dropped out of Stanford University to pursue their entrepreneurial dreams.
In 2020, they started KiranaKart, an online platform that delivered grocery items from local Mumbai stores. It later became Zepto.
Vohra and Palicha were featured in the IIFL Wealth Hurun India Rich List 2022. Both are 20 years old.