Quick commerce is picking up serious momentum in India, and Zepto’s latest round, which comes barely months after a previous one and values it at $5Bn, is a testament to that momentum. The prominent quick commerce player has successfully secured $340 million in a new funding round, pushing its valuation to an impressive $5 billion. This round of investment comes as Zepto competes with major players like Blinkit, Swiggy Instamart, and others.
Initially, Zepto aimed to raise $400 million in this round, but the company opted to cap the funding at $340 million. Of this amount, $250 million comes from General Catalyst, while Mars Growth contributed $50 million. The remaining funds were provided by Zepto’s existing investors. The entire round comprises primary capital, meaning that the money invested will directly translate into equity for the investors.
The funding from General Catalyst marks the firm’s first major investment in India since it deepened its presence in the country by merging with Venture Highway. General Catalyst is currently closing in on a $6 billion fund and has expressed plans to invest between $500 million and $1 billion in India over the coming years. Mars Growth, on the other hand, has already made several bets in the Indian startup ecosystem, backing companies like Zetwerk and Meesho.
Zepto’s valuation has seen a dramatic rise in recent months. The company’s value has surged from $1.4Bn in August 2023 to $3.6 billion in June 2024 to $5Bn now. This sharp increase is fueled by the company’s strong performance in the quick commerce space, where it has managed to carve out a share of the market despite fierce competition in the sector. Zepto has come out as one of those rare upstarts, which is witnessing a catapulting effect on its valuation and fundraises, like the ones we saw commonly during the 2020-21 boom and something we haven’t seen in the past couple of years or so.
The $340 million raised in this latest round brings Zepto’s total funding to over $1.6 billion, with $1 billion of that raised in just the past 50-60 days.
Founded by Aadit Palicha and Kaivalya Vohra, both 23 years old, Zepto has quickly established itself as a formidable competitor in the quick commerce industry. The company operates on a hyperlocal model, using a network of micro-warehouses to ensure rapid delivery of products in urban areas.
Eventually, Zepto swiftly carved its niche in the domestic market by delivering a wide range of products, from groceries to electronics, within minutes. This model has resonated well with consumers, leading to rapid adoption and significant market share gains.
The quick commerce market in India is expected to grow by 35% to nearly $7 billion in gross merchandise value, according to industry reports. Zepto’s rapid valuation growth and strong performance position it well to capitalize on this expanding market.
