Zepto Raises $665M In Funding, Valuation Soars To $3.6B For Quick Delivery
Indian grocery startup Zepto has secured $665 million in its second funding round within a year. This highlights the growing demand for rapid delivery services. The three-year-old company saw its valuation soar to $3.6 billion, up from $1.4 billion last August.
The latest investment round included contributions from Avenir Growth Capital and Lightspeed Venture Partners. Avra Capital, a fund initiated by former Y Combinator and Andreessen Horowitz investor Anu Hariharan, also made its first investment in Zepto. Some existing investors joined in as well.
Competitive Landscape
Zepto's financial boost strengthens its position against competitors like Blinkit, owned by Zomato, and Swiggy's Instamart. Flipkart is also eyeing the quick commerce sector. The market is fiercely competitive with high investments and slim margins.
Quick commerce services are gaining traction among Indian consumers. These services now extend beyond groceries to include mobile phones, tech accessories, and gifts. This expansion challenges e-commerce giants like Amazon and Walmart-owned Flipkart, as well as local mom-and-pop stores.
Market Growth
In April, Goldman Sachs reported that quick deliveries make up $5 billion, or 45%, of India's $11 billion online grocery market. This figure is expected to grow to $60 billion, or 70%, by 2030.
Zepto Co-Founder and CEO Aadit Palicha stated that the new funds would be used to double the number of dark stores to over 700 by March 2025. Dark stores are warehouses in high-demand areas that ship goods quickly.
Company Performance
Zepto's gross merchandise value has "multiplied year-on-year to a base of $1 billion+," according to Palicha. Over 75% of its dark stores are profitable at a core operating level.
As of January 2024, Zepto held a 28% market share, up from 15% in March 2022, according to HSBC. Blinkit had a 40% market share, while Instamart held 32% during the same period.
This funding round not only boosts Zepto's financial standing but also positions it well for future growth in a rapidly evolving market.
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