Zepto secures US$665M in funding round, to increase store count to 700

INDIA- Quick commerce delivery platform Zepto has raised US$665 million against a US$3.6 billion valuation, barely nine months after the delivery platform reported raising US$235 million against a US$1.4 billion valuation amid significant growth in the quick delivery sector. 

Lightspeed, Avenir Financial and Avra are some of the investment funds that led this latest investment round. Existing investors like Nexus, Glade Brook, Lachy Groom and StepStone also participated in the current investment round. 

The company has experienced remarkable growth since its inception in 2021. Zepto’s Gross Merchandise value (GMV) crossed the US$1 billion mark in 2023. At the end of the first quarter of 2024, three-quarters of the delivery platform’s stores were EBITDA positive, achieving profitability in just six months. 

Zepto announced it intends to increase its distribution outlets to 700 stores following the successful funding round. 

Aadit Palicha, Zepto’s CEO and co-founder, said, “The growing profitability of our stores has enabled rapid expansion while achieving near EBITDA positivity at the company level. By reinvesting the capital generated from mature stores, we plan to scale from 350 to 700 stores. If we can maintain customer satisfaction and operational discipline, we aim to go public soon.” 

The online delivery platform also intends to expand its operations, focusing on enhancing customer experience. 

Kaivalya Vohra, Zepto’s Chief Technology Officer, said, “The next phase of Zepto’s journey includes major projects that will significantly enhance customer experience, such as launching new categories and expanding initiatives like Zepto Pass. To support this growth, we plan to hire top talent across engineering, product, growth, finance, operations, and category management.” 

The funding round and Zepto’s success reflect the evolving quick commerce industry in India. Consumers in Indian urban cities appear to be positively receptive to the convenience offered by online delivery platforms like Zepto, Blinkit, and Swiggy’s Instamart, which deliver groceries in less than an hour. Zepto’s dense delivery network throughout India means it delivers in less than 10 minutes, posing a significant threat to conventional e-commerce platforms. 

According to TechCrunch, India’s quick commerce market is expected to grow at a compounded annual growth rate (CAGR) of 24.33% between 2024 and 2029.