Zepto, a startup that facilitates fast commerce, has raised $665 million in its Series F round from new investors, including Lightspeed, Avenir, and Avra (Anu Hariharan’s new fund). Glade Brook, Nexus, and StepStone, who are already investors, co-led the round. Goodwater and Lachy Groom also increased their investments.
The Mumbai-based business raised $200 million in a Series E round headed by venture capital firm StepStone, and in August of last year, it became a unicorn. In the same round, it also raised an additional $35 million.
The company claims that its valuation increased from $1.4 billion in the previous round to $3.6 billion (post-money) in the new round. To date, the company has raised over $1.2 billion.
Zepto will be able to compete with BlinkIt and Swiggy Instamart, two other well-funded players, thanks to the enormous funding. In India, quick commerce operators assert that they have discovered a sustainable model, in contrast to the West.
Zepto asserts that it has grown by 140% year over year and reached nearly EBITDA positivity, with an annualized gross merchandise value of more than $1 billion. By May 2024, approximately 75% of Zepto’s stores will be fully profitable.
“…We plan to continue operating with fiscal discipline as we scale from 350 stores to 700 stores by reinvesting the capital generated from mature stores back into the business…,”Adit Palicha, co-founder and CEO of Zepto, said in a statement.
Zepto’s losses increased to Rs 1,272 crore from Rs 390 crore in the previous fiscal year, despite a 14-fold increase in revenue to Rs 2,024 Cr in FY23.
Along with raising money, Anu Hariharan, the former MD of Y Combinator Continuity, officially launches Avra Capital, a growth equity fund. Zepto is the company’s first international investment.
In the meantime, Flipkart, a company owned by Walmart, is getting ready to introduce fast commerce soon. Google, the largest search engine, contributed $350 million to the company. A large amount of the money will go toward the rapid commerce venture, according to media reports.
