Zepto raises $665M in latest funding round at $3.6B valuation
What's the story
Zepto has successfully secured $665 million in a funding round, marking the largest fundraising event in India's quick commerce sector this year.
This latest round values the company at an impressive $3.6 billion.
The fundraising comes at a time when investors are becoming more selective in backing startups due to capital becoming harder to access.
This is the second large round in under a year for Zepto, which raised $231 million at a valuation of $1.4 billion in August 2023.
Investor participation
Zepto's funding round attracts new and existing investors
The fresh fundraise was a complete primary round and was co-led by existing backers such as Glade Brook, Nexus, and StepStone who contributed the majority of the capital.
New investors including Avenir Growth, Lightspeed, Avra and others joined the company's cap table with this funding round.
DST Global, an early backer of rival Swiggy, emerged as the single largest new investor in Zepto with an investment of around $100 million.
Expansion strategy
Zepto's impressive growth and future plans
Zepto's CEO, Advait Palicha, revealed that the company was able to secure this funding round due to its impressive growth, having multiplied its gross merchandise value (GMV) to over $1 billion in sales in just 2.5 years.
"We're growing by over 100% year-on-year," Palicha said.
The company plans to use the new funds to expand into new markets like Jaipur, Chandigarh, Ahmedabad and increase penetration in existing cities like Mumbai, Delhi, Bengaluru among others.
Expansion plans
Zepto's expansion strategy and workforce growth
Zepto aims to double its dark store count from 350 now to over 700 by March 2025.
To maintain its momentum, the company plans to expand its workforce from around 1,700 currently to approximately 2,200 in the coming quarters.
A significant portion of this expansion will be to set up operations in new pin codes.
Palicha noted that markets like Jaipur and Ahmedabad turn profitable faster than metro cities due to lower offline penetration and cheaper operating costs.
Future outlook
Zepto's revenue goals and domicile shift
Zepto's GMV is already over $1 billion in just three years since its inception.
The company's ad income is around ₹100 crore and aims to become a ₹1,000 crore business in the next 12 months.
Palicha also shared that Zepto, currently domiciled in Singapore, is in the process of moving its base back to India. The process will be completed in the next couple of months.