Zepto raises $665 million at $3.6B valuation

Quick commerce company Zepto announced on Friday that it has successfully raised USD 665 million (about Rs 5,560 crore) in its latest funding round, marking a significant increase in valuation to USD 3.6 billion. This valuation is nearly triple what it was just a year ago.

The funding round attracted participation from new investors including Avenir, Lightspeed, and Avra, as well as existing investors such as Glade Brook, Nexus, StepStone, Goodwater, and Lachy Groom.

Co-founder and CEO Aadit Palicha highlighted the company's rapid growth, stating, "We've achieved over a billion dollars in GMV (Gross Merchandise Value) in just 29 months, faster than any other internet company before us. Even with a base exceeding a billion dollars now, we are maintaining over 100% year-on-year growth. This growth trajectory has been a key driver behind this fundraising."

Zepto, based in Mumbai, operates in the quick commerce sector, which focuses on ultra-fast deliveries of consumer goods, distinguishing itself in a competitive market with its accelerated expansion and robust financial backing.

The young entrepreneur attributed their company's growth to the quick commerce firm's performance, emphasizing, "Our success largely stems from our commitment to excellence throughout the supply chain. Whether it's optimizing sourcing, enhancing efficiency at our main hubs, maximizing line hauls, or streamlining last-mile delivery, our innovative approaches and accurate forecasting have played pivotal roles. Despite our rapid expansion, we've maintained a strong focus on efficiency, allowing us to achieve close to full operating cash flow positivity today." 

Regarding overall financial health, he noted the business is approaching break-even cash flow. He also mentioned that around 75 percent of their stores are now fully EBITDA positive as of May 2024.

Looking ahead, he projected, "Over the next 12-18 months, although there may be fluctuations, we expect to remain close to operating cash flow positive. Our goal is to continue in this direction and prepare the business for potential listing within the next 9-12 months."

Kaivalya Vohra, co-founder and CTO of Zepto, outlined plans to recruit top talent in engineering, product development, growth strategy, finance, operations, and category management. He described Zepto as a company offering a high-growth environment with a strong culture of meritocracy and intensity, where dedication and ambition lead to significant career advancement opportunities.

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