Quick Commerce Startup Zepto Valuation Soars To $5 Bn After Raising Fresh $340 Mn Funds

Zepto, a quick commerce unicorn, has secured $340 million (about INR 2,850 crore) in a ‘follow-on financing’ round headed by General Catalyst, valued at $5 billion.

New investors Dragon Fund and Epiq Capital joined the round, as did current backers StepStone, Lightspeed, DST, and Contrary.

In a statement, Zepto cofounder and CEO Aadit Palicha stated that the new capital infusion will allow the company to strengthen its balance sheet while continuing to offer “robust growth and operating leverage”.

Palicha explained the reason for the fundraising round: “We couldn’t pass up the opportunity to bring on board a lead investor of Neeraj Arora’s calibre from General Catalyst. While these latest financings demonstrate significant confidence in Zepto’s success thus far, we acknowledge that there is still more work to be done to achieve our goal of developing a world-class internet firm out of India. At Zepto, we truly believe we are only at the beginning of our adventure.”

Notably, the purchase is one of General Catalyst’s first investments since acquiring Venture Highway earlier this year. The merged firm is apparently looking to invest $500 million to $1 billion in early and growth-stage startups in the country.

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With this, Zepto has raised more than $1 billion in three months. In June, the fast commerce major raised $665 million in a pre-IPO investment round at a valuation of $3.6 billion, more than doubling the previous estimate of $1.4 billion.

The fundraiser is expected to increase competitiveness in India’s booming quick commerce market. Flipkart and BigBasket have recently entered the “10-minute” delivery market, while Amazon, another ecommerce powerhouse, plans to launch speedy commerce as early as next year.

Zepto, founded in 2021 by Palicha and Kaivalya Vohra, is a rapid commerce business that claims to deliver groceries and other products in 10 minutes. Zepto became the first unicorn of 2023 last year, raising $200 million in a Series E fundraising round.

It competes with Zomato-owned Blinkit, Swiggy Instamart, the newly launched Flipkart Minutes, and Tata-owned BigBasket.

The latest financing comes as Zepto is purportedly preparing for an initial public offering (IPO) next year. Earlier this year, media speculated that the rapid commerce company was planning a reverse flip to India by 2026.

Zepto’s operating revenue increased 14.3 times to INR 2,024.3 crore in fiscal year 2022-23 (FY23) from INR 140.7 crore in the previous year. Meanwhile, net loss increased 3.4 times year on year (YoY) to INR 1,272.4 crore during the fiscal year under review.

Notably, according to TechCrunch, Palicha recently told an internal group of analysts and investors that the business expects to grow by 150% in the next 12 months.