Quick commerce major Zepto has raised $665 million in this year’s largest funding round, positioning itself for an initial public offering (IPO). Co-founder and CEO Aadit Palicha attributes this successful fundraise to the company’s exceptional business performance, noting that Zepto has grown 140 percent year-on-year, with sales surging from $500 million to over $1 billion in roughly three quarters. This rapid growth has made Zepto the fastest company in internet history to achieve such milestones.
The newly acquired funds are seen as pre-IPO financing, with the IPO expected to occur in 2025. Zepto plans to use the capital for capital expenditures (capex) and expansion into new markets. The company is generating significant profits from its mature stores, which will be reinvested into new ventures. Most investments in new stores, markets, and customer acquisition will be funded from these existing profits.
The quick commerce sector in India is becoming increasingly competitive, with Zepto raising $665 million to take on rivals like Blinkit and Swiggy Instamart. This latest funding round values Zepto at $3.6 billion, significantly surpassing its previous valuation of $1.4 billion when it raised $235 million in August 2023. The round was led by existing investors Glade Brook Capital, StepStone Group, and Nexus Venture Partners, with new investors DST Global, Avenir Growth Capital, Lightspeed Venture Partners, and Avra joining in.
This sector is marked by the presence of multiple well-funded players, including Zomato-owned Blinkit, Swiggy’s Instamart, and Tata Digital-owned BigBasket’s BB Now, all vying for market dominance. Following Zepto’s funding announcement, Zomato’s shares experienced a slight dip, closing down 1.5% at Rs 194.10 on the BSE. Zepto’s success in securing this substantial investment highlights its strong market position and growth potential, setting the stage for its anticipated IPO in 2025.
