Zepto Secures $665 Million in Funding, Doubling Valuation to $3.6 Billion

Bengaluru, India, In a major boost to India's quick commerce sector, Zepto has raised $665 million in a funding round, doubling its valuation to $3.6 billion. This development strengthens Zepto's position against competitors like Zomato-owned Blinkit, Swiggy Instamart, and Tata Digital-owned BB Now.

Zepto, founded in 2021 by Stanford dropouts Aadit Palicha and Kaivalya Vohra, plans to double its network of dark stores to 700 by March 2025, expanding into cities such as Ahmedabad, Chandigarh, and Jaipur. The company aims to enhance its market reach by entering ten new cities and increasing its headcount from over 1,600 to more than 2,000.

The funding round saw participation from existing investors, including Glade Brook Capital, StepStone Group, Nexus Venture Partners, Goodwater Capital, and Lachy Groom. New investors such as DST Global, Avenir Growth Capital, Lightspeed Venture Partners, and Avra also joined the round. The backing from these investors brings Zepto's total funding to $1.2 billion since its inception.

Aadit Palicha, co-founder and CEO of Zepto, emphasized the company’s commitment to going public next year. "This funding is a balance sheet building exercise going into an IPO. We are not in the business of taking a large amount of money and burning it," Palicha said.

Zepto has been a standout performer in the quick commerce space, achieving a gross merchandise value (GMV) of $1.4 billion as of May. The company continues to grow at over 100% year-on-year and is on track to become one of the fastest-growing Indian companies to reach a billion dollars in GMV terms.

The startup plans to enhance its product assortment from 3,000 to 10,000 stock keeping units (SKUs), expanding into electronics, beauty and personal care, toys, stationery, and appliances. This diversification aims to compete with established e-commerce platforms like Flipkart and Amazon.

Zepto’s new stores will be slightly larger, averaging 4,000 square feet compared to the current 3,500 square feet. This expansion is in line with rivals like Blinkit, which plans to increase its dark stores to 1,000 by the end of the fiscal year.

The quick commerce sector has seen a surge in funding activities, with major players like Flipkart, Zomato, and Swiggy expanding their operations. Flipkart recently closed a nearly $1 billion funding round from Walmart and Google, and Swiggy is preparing for a $1.2 billion initial public offering. 

Zepto's rapid growth and strategic expansion position it as a key player in India's burgeoning quick commerce market. As the sector continues to evolve, Zepto’s innovative approach and robust backing from top-tier investors are set to drive its success in the coming years.