Zepto raises $665m to double dark store count

• The three-year-old startup’s valuation skyrockets from $1.4b in August to $3.6b now.
• Quick commerce trend has put pressure on traditional e-commerce giants like Amazon and Flipkart, who are now reportedly preparing to enter the space.
• Zepto operates in a highly competitive market, where it faces off against Zomato-owned Blinkit and Swiggy’s Instamart.

Mumbai-based grocery startup Zepto has raised $665 million in an Series F round, underscoring the high demand for services that deliver essentials within minutes.

The latest funding round, which comes less than a year after Zepto’s previous fundraising, highlights the remarkable growth trajectory of the company.

Zepto, a three-year-old startup, has seen its valuation skyrocket from $1.4 billion in August to $3.6 billion, a clear testament to the company’s ability to capitalise on the evolving consumer preferences in the quick commerce space.

The company’s co-founder and CEO, Aadit Palicha, has outlined ambitious plans to double the count of its dark stores, or warehouses located in high-demand neighborhoods, to over 700 by March 2025.

Highly competitive market

The investment round was led by prominent players in the industry, including Glade Brook, Nexus, and StepStone Group, with additional participation from Avenir, Lightspeed, Avra, Goodwater, Lachy Groom, and Contrary.

Interestingly, DST Global, an early backer of Zepto’s rival Swiggy, also co-led the new funding round, indicating the fierce competition in the quick commerce space.

Zepto operates in a highly competitive market, where it faces off against Zomato-owned Blinkit and Swiggy’s Instamart. However, the company’s impressive growth metrics suggest that it is well-positioned to maintain its competitive edge.

Zepto’s revenue has risen by 140 per cent year-over-year, and its annualised gross merchandise value (GMV) is on track to exceed $1 billion.

The quick commerce sector has been rapidly expanding in India, with customers increasingly adopting these services for a wide range of products, including groceries, mobile phones, tech accessories, and even gifting items.

The trend has put pressure on traditional e-commerce giants like Amazon and Flipkart, who are now reportedly preparing to enter the quick commerce space.

Zepto’s success in this highly competitive market can be attributed to its focus on efficiency and scale. The company’s dark stores are becoming increasingly EBITDA positive, with the time taken to reach profitability reduced from 23 months to just six months.

The improved efficiency, coupled with Zepto’s growing market share, which has increased from 15 per cent in March 2022 to 28 per cent as of January 2024, positions the company for continued success.