Quick Commerce Giant Zepto Secures $350 Mn After Closing Latest Funding Round from Domestic Investors

Continuing its investment boom, rapid commerce behemoth Zepto has received another $350 million (approximately INR 2,950 crore) in a round led by Motilal Oswal’s private wealth business.

Zepto was founded in July 2021 by Palicha and Kaivalya Vohra, and it claims to deliver groceries and other products in 10 minutes. With operations in 17 locations, Zepto claims to operate over 550 dark storefronts and processes more than 7 lakh orders per day. It also claims to hire over 56,000 delivery partners.

Domestic high-net-worth individuals (HNIs), family offices, and financial institutions took part in the round, including the Taparia Family Office, Mankind Pharma Family Office, RP Sanjiv Goenka Group, and Cello Family Office.

In addition, celebrities Abhishek Bachchan and Sachin Tendulkar, as well as Haldiram Snacks Family Office, Sekhsaria Family Office, Kalyan Family Office, Happy Forgings Family Office, and Mothers Recipe Family Office, invested in the round.

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

According to a statement from Zepto, the round was fully funded by domestic investors. While the company did not specify how it intends to utilize the funds, the funds could be used to expand its 10-minute food delivery service, dark store network, and fintech capabilities.

“When we started this venture, the risk appetite among domestic investors was limited – especially to trust 18-year-olds with their money. Today, we are humbled to have reached a place in India’s economic growth where we’ve not only fostered that trust but also spearheaded a fundraise of this magnitude, which will hopefully set a precedent for the startups that follow…,” said Zepto cofounder and CEO Aadit Palicha.

The development comes just a week after allegations broke that the fast commerce behemoth was aiming to raise $300 million from local investors. At the time, it was claimed that Indian shareholding in Zepto would likely rise to roughly 35% following the transaction, which would be valued at $5 billion.

With this, the company has raised over $1.3 billion in the last several months. It raised $665 million in June at a valuation of $3.6 billion, followed by another $340 million in August at a valuation of $5 billion.

The fundraising effort comes amid increased rivalry in India’s booming rapid commerce sector.

While freshly listed Swiggy has set aside a significant portion of the revenues from the IPO to fuel its quick commerce vertical, Zomato-owned Blinkit has also aggressively ramped up its operations and product portfolio to fulfill the growing demand for 10-minute delivery.

Zomato is also trying to raise INR 8,500 crore through a certified institutional placement. At least some of this money will most likely be used to help Blinkit extend its presence.

Furthermore, the development of 10-minute food delivery services by major businesses has increased rivalry, with startups spending millions to meet consumer demand for quick-to-prepare foods.

And this dogfight is not without cause. According to a recent survey, the Indian fast commerce ecosystem had a 280% increase in sales over the last two years.

Its gross merchandise volume (GMV) surpassed $1 billion in fiscal year 2023-24 (FY24), with approximately 75% of its dark stores reporting full profitability before interest, taxes, depreciation, and amortization (EBITDA) by May 2024.

Zepto plans to have an initial public offering (IPO) in the next years and is in the process of relocating its headquarters to India.