Quick commerce platform Zepto has raised $665 million in a funding round that was co-led by existing investors Glade Brook, Nexus, and StepStone, along with Goodwater and Lachy Groom. New investors such as Avenir, Lightspeed, and Avra Capital also participated in a round that pegged the valuation of the unicorn at $3.6 billion, the company said in a press statement.
The funding announcement comes just nine months after it raised $235 million at a $1.4 billion valuation.
The company plans to double its store count to 700 by March 2025. Zepto’s gross merchandise value (GMV) has multiplied year-on-year to more than $1 billion, and about 75 per cent of its stores are fully EBITDA (earnings before interest, taxes, depreciation, and amortization) positive as of May 2024, the statement said.
Read: Zepto’s Financing Round Might Include DST Global, Lightspeed, Valuing Start-Up at $3 Billion: Report
“We plan to continue operating with fiscal discipline as we scale from 350 stores to 700 stores by reinvesting the capital generated from mature stores back into the business,” said Aadit Palicha, co-founder and chief executive of Zepto.
The company will also invest the funds to foray into new categories, expand initiatives like Zepto Pass, and hire top talent across various teams.
“The most exciting part about this next phase of Zepto’s journey are the major new projects that will 10X the customer experience, from launching new categories to expanding initiatives like Zepto Pass. To build out this roadmap, we plan to hire top talent across engineering, product, growth, finance, operations, and category management,” said Kaivalya Vohra, the company's co-founder and chief technology officer (CTO).
Currently, all major quick commerce players, including Zomato’s Blinkit, Swiggy Instamart, Zepto, and Tata-backed BigBasket, are planning to foray into delivering high-value electronics and white goods such as mobile phones, air conditioners, and washing machines. This is likely to help the companies increase their average order value (AOV), consequently boosting their profitability.
This fundraise also marks the launch of Avra Capital, a growth equity fund started by Anu Hariharan (the former Managing Director of Y Combinator’s Continuity Fund). Zepto is the firm’s first investment globally.
