Zepto Set to Raise $310 Million, Valuation Soars to $5 Billion Amidst Quick-Commerce Surge

Zepto, the rapidly growing quick-commerce firm, is gearing up for a major funding boost as it seeks to raise an additional $310 million, propelling its valuation to an impressive $5 billion. This marks a 40% increase from its previous funding round just over a month ago, reflecting the company's robust growth and expanding market presence.

Major Investors to Fuel Zepto's Growth

The new funding round, as reported by The Economic Times, is poised to attract significant investment from notable players in the financial world. Mars Growth Capital, co-managed by Mitsubishi UFJ Financial Group Inc. and Israel’s Liquidity Group, is expected to invest approximately $50 million. Additionally, General Catalyst, a prominent US-based venture capital firm, is projected to contribute around $200 million. The total size of the funding round could potentially reach $350 million, with contributions from existing investors and high-net-worth individuals.

This latest investment will push Zepto’s total fundraising to nearly $1 billion across two successive rounds, underscoring the company's rapid ascent in the quick-commerce sector. To safeguard existing investors from dilution, the terms of the funding include a restriction preventing Zepto from raising more than $350 million within 90 days of this round, even if the valuation increases.

Strategic Moves and New Board Member

Mars Growth Capital, known for its investments in Indian unicorns like Zetwerk and Eruditus, will be joined by General Catalyst, which previously invested in Cred. As part of the investment deal, Neeraj Arora, a partner at General Catalyst and former chief business officer of WhatsApp, will join Zepto's board, bringing valuable experience to the company's leadership.

Zepto's Relocation and IPO Plans

Currently headquartered in Singapore, Zepto is preparing to relocate back to India in anticipation of an initial public offering (IPO). The company's strategic move is aimed at capitalizing on its growth momentum and strengthening its presence in the Indian market. Zepto’s impressive funding history includes a substantial $665 million secured in June 2024, which doubled its valuation from $1.4 billion in August 2023 to $3.6 billion.

Expanding Footprint in the Quick-Commerce Space

The new round of financing will equip Zepto with the resources needed to compete fiercely with other major players in the quick-commerce sector, such as Blinkit, Swiggy Instamart, and Tata Digital-owned BigBasket's BB Now. Blinkit, valued at $12-13 billion and owned by Zomato, plans to expand its network to 2,000 dark stores by 2026. In response, Zepto aims to establish 700 dark stores by March 2025, further boosting its annualized gross sales run rate, which currently stands at around $1.5 billion.

As Zepto continues to scale and enhance its quick-commerce offerings, the latest funding round is set to play a crucial role in solidifying its market position and driving future growth.