Blinkit-rival Zepto to raise $650 million at $3.5 billion valuation

By Mudit Dube

Jun 13, 2024

10:17 am

What's the story

Zepto, a leading instant grocery delivery startup, is set to raise approximately $650 million from both existing and new investors. This funding round is expected to value the company at $3.5 billion. The current investors include StepStone Group, Nexus Venture Partners, and Glade Brook Capital. New investors joining this round are Avenir Growth, Lightspeed Venture Partners, DST Global, and Avra. This significant increase in valuation underscores the growing interest in India's quick commerce sector.

Valuation growth

Zepto's valuation more than doubles in a year

This new funding round will more than double Zepto's valuation from $1.4 billion to $3.5 billion. The company's valuation has seen steady growth over the years, starting at around $250 million in 2021 and reaching $1.4 billion in 2023. The current valuation of $3.5 billion represents a significant increase within a year, indicating strong investor confidence in the company's future growth potential.

Expansion

Zepto's rapid growth and expansion plans

Zepto, one of the top three players in India's quick commerce sector, processes around 550,000 orders per day through its network of 340 dark stores across seven cities. The company aims to achieve EBITDA breakeven by September 2024 as its business matures and cash burn reduces to single-digit million dollars. This ambitious growth plan aligns with the company's goal of becoming a dominant player in the quick commerce industry.

Investor lineup

Zepto's investor lineup and competition in quick commerce

Nexus and StepStone Group are expected to lead the funding round by contributing a majority of the total $650 million. This investment marks one of Nexus's largest ever and underscores the firm's confidence in Zepto's growth potential. The quick commerce sector in India is currently dominated by Blinkit, with a market share of about 40-45%. Other major players include Swiggy Instamart and Tata's BigBasket (BB Now), all of which are competing to establish themselves in this rapidly growing industry.