Grocery startup Zepto has raised $665 million in a recent investment round, boosting its valuation to $3.6 billion, according to a statement released on Friday. The latest funding comes less than a year after its previous fundraising in August 2023.
In August 2023, Zepto had a valuation of $1.4 billion after raising $235 million. Founded in 2021, Zepto has rapidly scaled its operations and market presence.
The latest investment round saw participation from New York-based Avenir Growth Capital and Lightspeed Venture Partners, along with a maiden investment from Avra Capital, a fund launched by former Y Combinator and Andreessen Horowitz investor Anu Hariharan. Existing investors also participated in the round, Zepto said in its statement.
Zepto reported that its gross merchandise value (GMV) has “multiplied year-on-year to a base of $1 billion+”, and nearly 75% of its stores are fully EBITDA positive as of May 2024. Previously, stores took 23 months to achieve profitability, but now they reach this milestone in just six months, according to Zepto’s statement.
Aadit Palicha, co-founder and CEO of Zepto, stated, “The dynamics of stores turning profitable faster has enabled Zepto to grow rapidly while achieving near EBITDA positivity at a company level. We plan to continue operating with fiscal discipline as we scale from 350 stores to 700 stores by reinvesting capital from mature stores back into the business.”
Palicha also hinted at the possibility of Zepto going public “soon”.
Indian consumers are increasingly adopting quick commerce services, which now extend beyond groceries to include mobile phones, tech accessories, and gifting items. This expansion challenges e-commerce giants like Amazon and Walmart-owned Flipkart and pressures traditional neighborhood mom-and-pop stores.
Goldman Sachs reported in April that quick deliveries account for $5 billion, or 45% of India’s $11 billion online grocery market. This segment is projected to grow to $60 billion, or 70%, by 2030. As of January 2024, Zepto held a 28% market share, up from 15% in March 2022, according to HSBC. In comparison, Blinkit had a 40% market share, and Instamart held 32%.
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