Zepto Secures $665 Million in Series F Funding to Solidify Leadership in Quick Commerce
By Shrija Roy
Monday, June 24, 2024
In a significant milestone for the quick commerce sector, Zepto has successfully raised $665 million in its Series F funding round. This major financial injection underscores investor confidence in the startup’s business model and growth potential. The funding round saw participation from new investors Avenir, Lightspeed, and Avra, alongside returning backers Glade Brook, Nexus, and StepStone. Notably, Avra’s involvement marks the first investment from Anu Hariharan’s growth equity fund.
Strategic Allocation of Funds
Zepto plans to utilize the capital to fortify its position against competitors such as BlinkIt and Swiggy Instamart. Beyond mere competition, the company is focused on building a sustainable strategy to ensure long-term growth in India’s highly competitive quick commerce market. Distinct consumer behaviors and logistical challenges unique to India set this market apart from its Western counterparts.
Financial Performance and Growth
According to Zepto’s statement, the startup is nearing EBITDA positivity, showcasing a remarkable 140% year-on-year growth and surpassing $1 billion in annualized gross merchandise value (GMV). As of May 2024, 75% of Zepto’s stores are fully EBITDA positive, reflecting an efficient operational model.
Founders’ Vision and Strategic Financing
Founded in 2021 by Stanford dropouts Aadit Palicha and Kaivalya Vohra, Zepto has quickly ascended in the quick commerce sector. The co-founders view this funding round as a strategic pre-IPO financing effort. Palicha stated that the capital infusion would strengthen Zepto’s balance sheet in preparation for a significant IPO, emphasizing the firm’s readiness for scale.
Investor Confidence
The participation of Avra Capital in this round highlights the robust confidence investors have in Zepto’s business model and growth trajectory. Other investors, including Goodwater and Lachy Groom, have increased their stakes, demonstrating strong continued support from existing backers.
Competitive Landscape
Zepto’s funding round occurs amidst an intensifying quick commerce sector in India. Walmart-owned Flipkart is set to launch its own quick commerce service, adding another formidable contender to the market.
Join Entrepreneur Live WhatsApp News Group: https://chat.whatsapp.com/BdCFMQ8EMDe2soNehCSOxf
The latest fundraising underscores the rapid evolution and investor optimism in India’s quick commerce industry. With the newly raised capital, Zepto is well-positioned to scale its operations, drive sustainable growth, and prepare for a significant IPO. This development not only consolidates Zepto’s status as a key player in the quick commerce space but also sets the stage for an exciting phase of growth and expansion in the coming years.
