Quick commerce Zepto raises $665 Mn at $3.6 Bn valuation

Quick commerce company Zepto has raised $665 million in its Series F round from new investors Avenir, Lightspeed, and Avra (Anu Hariharan’s new fund), among others. Existing investors Glade Brook, Nexus, and StepStone co-led the round with Goodwater and Lachy Groom doubling down their stakes as well.

The Mumbai-based company turned unicorn in August last year after raising $200 million in a Series E round led by venture capital firm StepStone. It also raised $35 million more in the same round.

As per the company, it has been valued at $3.6 billion (post-money) in the fresh round, up from $1.4 billion during the last round. The firm has raised more than $1.2 billion to date.

The mammoth funding will help Zepto compete with other two deep-pocketed players, BlinkIt and Swiggy Instamart. Unlike the West, quick commerce operators in India claim to have found a sustainable model.

Zepto claims that it has achieved near EBITDA positivity with 140% year-on-year growth with an annualized gross merchandise value of over $1 billion. According to Zepto, about 75% of its stores are fully EBITDA positive as of May 2024.

“...We plan to continue operating with fiscal discipline as we scale from 350 stores to 700 stores by reinvesting the capital generated from mature stores back into the business…,”Adit Palicha, co-founder and CEO of Zepto, said in a statement.

Zepto saw a 14-fold jump in its revenue to Rs 2,024 Cr in FY23 while its losses widened to Rs 1,272 crore from Rs 390 crore in the previous fiscal year.

This fundraise also marks the formal launch of Avra Capital, a growth equity fund started by Anu Hariharan (the former MD of Y Combinator Continuity). Zepto is the firm’s first investment globally.

Meanwhile, Walmart-owned Flipkart is also gearing up to launch quick commerce service soon. Entrackr exclusively reported the development in March. The firm also raised $350 million from search giant Google. As per media reports, a significant portion of the funds will go towards the quick commerce foray.