BTN News: First Investment for Zepto, India’s Leading Standalone Quick-Commerce Company Raises $665M at a Valuation of $3.6B With this significant investment, Zepto is leading the way in the emerging quick-commerce space in what could set up a more heated fight against Zomato-owned Blinkit, Swiggy Instamart and BB Now from Tata Digital’s BigBasket among others.
The Series D was led by returning investors; Glade Brook Capital, StepStone Group and Nexus Venture Partners and existing backers Goodwater Capital and Lachy Groom also took part in the round. Joining the round were newer investors DST Global and Avenir Growth Capital as well as Lightspeed Venture Partners and Avra, all hoping to take their own slice of the Zepto pie. Founded in 2021 by Stanford dropouts Aadit Palicha and Kaivalya Vohra, the Mumbai-based startup has now raised $1.2 billion till date.
Expansion and Future Plans
Zhivetin (Zepto) expects to take the scale of operations by a huge leap, with aims to increase its dark store count from 350 operating in just 10 cities to more than 700 such kitchens by March 2025, along with foraying into newer cities such as Ahmedabad, Chandigarh and Jaipur. The startup is also working to grow its workforce from 1,600 employees to more than 2,000 within the next few months.
CEO Aadit Palicha said the company’s rapid GMV growth and mature stores that were cashflow positive had ensured this latest round. Around 40% of the new money came from first-time investors. Palicha feels that Zepto’s emphasis on sustainable growth and profitability is what has drawn investors to the company.
Competitive Landscape
Investments In India Quick Commerce On Rise Blinkit, which plans to have 1,000 dark stores by the end of the fiscal year, follows Swiggy Instamart with slightly over 500 dark stores Zepto is also upping its store size slightly from 3,500 to 4,000 square feet and carrying more SKUs — from 3,000 to 10,000.
On Diversification & Market Trends
Another trend emerged after attempts of expansion get unsuccessful with quick-commerce platforms, that they are now Diverting away from Groceries in Segment Diversification like electronics, beauty & personal care, toys, stationery and appliances. This diversification is in line with what traditional e-commerce giants like Flipkart and Amazon, which have also expanded into grocery among other segments. The unprecedented growth in the sector has seen significant funding flow in: Flipkart secured almost $1 billion from Walmart and Google, while Zomato invested Rs 300 crore into Blinkit. As it gears up to go public at a $1.2 billion valuation, Swiggy has launched more in-house quick-commerce businesses.
Path to Public Listing
Meanwhile, Zepto is also getting ready for a public listing next year and has initiated steps to shift its domicile from Singapore to India. Palicha believes the move is part of the balance sheet strengthening exercise before their Initial public offering (IPO). He insisted that the company’s growth is in reinvesting cash from mature stores back into further expansion.
Conclusion
The new investment in Zepto is further testimony to the fact that venture capitalists are bullish about the quick-commerce category, which means that the big players will be open to ramping up their battles over it. With Zepto prepping for an IPO and further establishing its presence, the war-for-quick-commerce in India is about to get more intense.
