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Zepto Secures $665 Million in Rapid Succession Funding Round

Zepto

Indian grocery startup Zepto has raised $665 million in a recent investment round, highlighting rapid fundraising success within a year of its previous round. This underscores strong investor interest in quick-delivery essential services.

Zepto, a three-year-old Indian grocery startup, has seen its valuation soar to $3.6 billion, up significantly from $1.4 billion just last August.

This sharp increase underscores the rapid growth and investor confidence in the company’s business model and market potential.

In its latest funding round, Zepto attracted investments from New York-based Avenir Growth Capital, Lightspeed Venture Partners, and Avra Capital — the latter being the debut investment from a fund established by former Y Combinator and Andreessen Horowitz investor Anu Hariharan.

Additionally, several existing investors joined in, reflecting continued support and interest in Zepto’s growth and potential.

The latest funding deal significantly bolsters Zepto’s financial position as it competes fiercely with Blinkit (owned by Zomato) and Instamart (from Swiggy) in India’s intensely competitive quick commerce sector.

This market is characterized by substantial investments and narrow profit margins. Reports suggest Flipkart is also gearing up to enter this space.

Indian consumers are increasingly embracing quick commerce, which has expanded beyond groceries to include mobile phones, tech accessories, and gifts, challenging e-commerce giants like Amazon and Flipkart while squeezing local neighborhood stores.

Goldman Sachs highlighted in April that quick deliveries currently represent $5 billion, or 45%, of India’s $11 billion online grocery market, with projections indicating this segment could grow to $60 billion, capturing 70% of the market by 2030.

Zepto’s Co-Founder and CEO Aadit Palicha announced plans to utilize the newly raised funds to expand aggressively, particularly by doubling the number of its dark stores to more than 700 by March 2025.

These dark stores, strategically positioned in high-demand neighborhoods, play a crucial role in efficiently fulfilling orders and ensuring prompt deliveries to customers.

This expansion aims to strengthen Zepto’s operational capacity and enhance its service reach in the competitive quick commerce market in India.

Zepto’s gross merchandise value (GMV), representing the total value of transactions on its platform, has grown significantly year-on-year to surpass $1 billion.

Aadit Palicha also highlighted that more than 75% of Zepto’s dark stores are profitable at a core operating level, underscoring the efficiency of their business model.

According to HSBC data from January 2024, Zepto has captured a 28% market share, a substantial increase from 15% in March 2022.

This places Zepto in a competitive position within the quick commerce sector in India, where Blinkit leads with a 40% market share, followed by Instamart at 32%.

These figures highlight Zepto’s rapid growth and its emergence as a key player in the evolving market landscape.

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