Zepto raised $200 M at $1.4 B valuation, becomes first Indian unicorn of 2023
Zepto, a platform for quick commerce and 10-minute deliveries, has been named the first unicorn of 2023 after raising $200 million in its Series E round. Venture capital firm StepStone led the round, which also included existing backers like Glade Brook, Nexus Ventures, and Lachy Groom as well as Goodwater.
“There is no secondary component in this round,” said Aadit Palicha, Zepto’s co-founder and chief executive.
With this, Zepto has now raised more than $560 million, increasing its valuation from $900 million when it raised $200 million in Series D in May of last year to $1.4 billion today. The last unicorn to exist in India was Molbio, who attained the status in September 2022.
Zepto completed its transition from a Series A to Series E stage startup in just 21 months, making it one of the faster startups to reach the $1 billion valuation mark.
“We will deepen our presence in existing cities rather than spreading wings to new cities,” added Palicha.
In seven cities, including Delhi NCR, Mumbai, Bengaluru, Kolkata, Hyderabad, Pune, and Chennai, Zepto claims to offer quick delivery on 6,000 different products, including groceries, fruits, and vegetables. According to Palicha, its top three sales markets are Mumbai, Bengaluru, and the National Capital Region.
Nexus Ventures held the largest stake in Zepto as of the Series D round, holding 20.07%, followed by Palicha and Kaivalya Vohra and their family members, who collectively owned close to 28%. According to media estimates, the company’s $200 million round will likely reduce its existing captable by 14%.
“We closed FY23 with a 10-fold jump in revenue in the last fiscal (FY23) with an improvement in EBITDA. Our current monthly average revenue run rate is around Rs 400 crore and our growth numbers will see a similar curve in FY24,” added Paslicha.
While the business has not yet released its FY23 financial data, Zepto reported revenue of Rs 142.36 crore and losses of Rs 390 crore in FY22.
The competition in the quick commerce sector will increase as a result of Zepto’s unicorn round because Swiggy Instamart and Zomato-owned BlinkIt also have substantial funding. Swiggy leads the pack in terms of scale, selling grocery and FMCG products for Rs 2,036 crore through Instamart in FY22, while Zomato made Rs 806 crore through Blinkit in FY23 and Rs 385 crore in Q1 FY24. Swiggy has not yet submitted its FY23 numbers.
Due to a funding shortage, Dunzo, one of Zepto’s rivals, is fighting for its existence. Over 400 employees have already been let go by the company, which is backed by Reliance and Google, in three phases in 2023. Several employees have also had their salaries postponed. Additionally, according to media reports, if the company raises the next round of funding, its valuation may be reduced by 50%. In FY22, Dunzo reported revenue of just Rs 54 crore.
