Zepto Eyes Additional $250 Million Fundraise Amid Investor Interest

Quick commerce unicorn Zepto, which recently secured $665 million at a $3.6 billion valuation, is contemplating another funding round to raise $250 million. Sources indicate this new round could elevate its valuation to $4.6 billion and might even reach $400 million.

General Catalyst is expected to join as a new investor, with interest also shown by sovereign funds like KKR, Singapore’s GIC, and Abu Dhabi Investment Authority (ADIA). Zepto has not commented on the speculation, and attempts to contact the aforementioned investors were unsuccessful.

The last funding round on June 21 valued Zepto at $3.6 billion, a significant increase from the $1.4 billion valuation in August 2023, when it raised $200 million led by StepStone Group. Despite a subdued investment climate for growth-stage companies, Zepto has garnered substantial interest.

The June funding round was led by existing investors such as Glade Brook Capital, StepStone Group, and Nexus Venture Partners, along with new investors like DST Global, Avenir Growth Capital, and Lightspeed Venture Partners. CEO Aadit Palicha noted that about 40% of the funds came from new investors.

Analysts suggest Zepto, India's only standalone quick-commerce player, is raising the stakes in a competitive market dominated by Blinkit, Swiggy Instamart, and Tata Group’s BB Now. Zepto plans to use the new funds to expand into 10 new markets, including Jaipur and Ahmedabad, and strengthen its presence in cities like Delhi and Mumbai.

Zepto holds a 28% market share, trailing Blinkit’s 40% but ahead of Instamart, which has seen its share drop to 32%. In metro areas, Zepto has a 32% share, second to Blinkit's 37%.

Zepto's gross merchandise volume (GMV) has grown rapidly, now at a $1.2 billion run-rate, with sales surpassing Rs 2,000 crore in FY23. However, the company faces significant losses, posting Rs 1,272 crore in FY23.

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