Zepto is an Indian startup is on track to become the first unicorn of 2023 in the country. Thanks to an expected $150 million Series E funding round. Led by StepStone Group and supported by Nexus Venture Partners. This funding will elevate Zepto’s valuation to $1.3 billion. The swift commerce delivery startup has garnered recognition for its commitment to delivering groceries within 10 minutes.
The Indian startup ecosystem is on the brink of welcoming its very first unicorn of 2023. Zepto, the quick-commerce delivery startup, is currently engaged in advanced discussions to secure a staggering $150 Mn in its forthcoming Series E funding round.
This injection of funds would propel Zepto’s valuation to an impressive $1.3 Bn. Remarkably, the funding round, anticipated to conclude within the next month, is being led by StepStone Group, a notable participant in Zepto’s existing backer, Nexus Venture Partners. The infusion from StepStone Group is estimated to be approximately $60 Mn, while Nexus Venture Partners will be contributing around $40 Mn.
The remaining funds will be sourced from other pre-existing investors, Glade Brook Capital and Lachy Groom, among others. It is worth noting that this funding round will be exclusively equity-based, with no debt component, as confirmed by trusted sources.
It is also important to highlight the recent downturn in the number of unicorns in India. In 2021, the country witnessed the rise of an impressive 44 unicorns. However, this figure dropped significantly to only 21 unicorns in 2022.
Zepto’s impending funding round positions it as the first Indian unicorn of 2023, breaking the dry spell that has persisted for nearly seven months since the start of the year.
Zepto, founded in 2021 by Aadit Palicha and Kaivalya Vohora, swiftly capitalized on the escalating demand for quick-commerce delivery services triggered by the Covid-19 pandemic. The startup gained widespread recognition by promising lightning-fast grocery deliveries, boasting a mere 10-minute turnaround time. This unique value proposition swiftly attracted the interest of numerous investors.
The startup gained considerable attention when it successfully secured $60 Mn in funding during a previous round involving Glade Brook Capital, Nexus Venture Partners, and Y Combinator, among other prominent investors, in 2021. Subsequently, Zepto raised $100 Mn in a Series C funding round and achieved an even greater feat by securing $200 Mn in its Series D round last year. The Series D funding round, led by Y Combinator’s Continuity Fund, propelled Zepto to a valuation of approximately $900 Mn.
Zepto’s financial report for the fiscal year 2022 revealed a standalone net loss of INR 390.3 Cr. However, amidst the losses, the company managed to generate INR 142.3 Cr in operating revenue. Notably, Zepto commenced operations in April 2021 and recorded total expenses of INR 532.7 Cr during the fiscal year.
In the fiercely competitive landscape of quick-commerce delivery, Zepto finds itself contending with industry giants such as Swiggy’s Instamart, Zomato’s Blinkit (acquired for $568 Mn last year), and Dunzo, backed by Reliance Retail.
While Swiggy recently infused $700 Mn into Instamart in December 2021, Dunzo has been confronted with significant cash flow challenges. This has led to employee layoffs and delayed salary payments, presenting Zepto with a unique advantage in the market.
