Darshita Jain, Pune
In a press conference on Friday, Zepto, a Q-e-commerce startup, revealed that it had raised $200 million in a Series E round of funding. The two-year-old business has raised money with a USD 1.4 billion valuation, making it India’s first unicorn for 2023.
The California-based venture capital firm Goodwater Capital trails StepStone Group in fundraising efforts. According to the founders of Zepto, existing investors such as Nexus Venture Partners, Glade Brook Capital, Lachy Groom, and others increased their stakes in the business. Zepto received advice from Avendus during the fundraising round.
We want to keep our composure under control, strive for EBITDA positivity, and maintain our discipline even with this capital. Technology and products are the main factors in that journey for us regarding P&L improvement. In a prepared statement, Kaivalya Vohra, co-founder and CTO of Zepto, stated that the company is currently developing one of the best supply chain product stacks in the nation and is also heavily investing in customer-facing products.
During the press conference, Palicha stated that the company intends to raise money to add 40% more dark stores. Zepto currently operates 200+ stores in 14–15 cities. About 150 of Zepto’s 200+ stores are already EBITDA-positive, Palicha said in a conversation with ETRetail earlier this year. According to industry estimates, Zepto’s stores become profitable 15 to 18 months after opening, compared to the 24 to 36 months it typically takes a grocery or supermarket chain. The company currently makes more than Rs. 400 crore in monthly sales. Although Palicha declined to disclose the startup’s current burn rate, she did note that Zepto’s customer acquisition costs and delivery costs have decreased year over year by about 70% and 35%, respectively.
He confirmed that the Q-Commerce startup intends to go public by early 2025 while sharing IPO plans. The business recently announced significant changes. It expanded the senior leadership role and hired a new COO and CFO. Zepto faces competition from companies like Swiggy Instamart, Blinkit, Tata’s BB Now, and Dunzo, which is backed by Reliance. Industry reports indicate that Zepto currently holds a market share of between 24 and 25%. Zepto, which debuted in 2021, raised USD 60 million from backers, including Lachy Groom, Neeraj Arora, Manik Gupta, and institutions like Glade Brook Capital, Nexus, and Y Combinator. Later that year, the business raised $100 million in a Series C round.
The quick commerce startup raised $200 million in May 2022, with the help of Y Combinator, at a valuation of about USD 900 million. Along with previous investors, Kaiser Permanente joined the round.