General Catalyst has led a $340 million follow-on financing round into Zepto, along with new investors Dragon Fund and Epiq Capital. It also saw participation from existing investors StepStone, Lightspeed, DST, and Contrary as they further increased their stake in the company.
PC: The Economic Times
At this latest infusion of funds, the valuation of Zepto increased by almost 40% to $5 billion from $3.6 billion in June. This increase follows after Zepto raised $665 million earlier in the year in its Series F round, placing the total fundraising this year at over $1 billion and over $1.2 billion over the last 12 months since its founding, with a cumulative total surpassing $1.5 billion.
Zepto shared a series of ambitious expansion plans, adding that it eyes doubling its dark stores to 700 by March 2025, while setting entry into new markets such as Nasik, Chandigarh, Vizag, and Ahmedabad. It is also looking at strengthening its presence in metros where it already exists.
Aadit Palicha, the co-founder and chief executive officer of Zepto, said, “This follow-on financing is a really strategic end- bringing on board a lead investor of Neeraj Arora’s caliber from General Catalyst. Together with continued strong growth and operational efficiency, it will be instrumental in strengthening our balance sheet.”.
Zepto serves millions of customers through its delivery hubs across the country, listing more than 10,000 products across various categories, all delivered within just 10 minutes.
The company, headquartered in Mumbai, has reached a few more milestones on the road to EBITDA positivity, as it recorded 140% year-on-year growth and an annualized gross merchandise value of over $1 billion (Rs 8,300 crore). By May 2024, about 75% of the stores maintained by Zepto were reported as fully EBITDA positive.
In comparison, Zepto said its revenue jumped 14 times to Rs 2,024 crore in FY23. The losses also widened to Rs 1,272 crore, reflecting the competitiveness and fluidity that have roiled the quick commerce space in recent months.
Competition is heating up in the quick commerce sector, with noted players such as Flipkart, BigBasket, Swiggy Instamart, and Blinkit from Zomato eyeing a market share. With the entry of e-commerce giant Amazon expected into the quick commerce arena early next year, Zepto said it would continue to strengthen its position as a leader in this dynamic, fast-changing sector.
