Mumbai-based quick commerce company Zepto has raised $340 million in a follow-on financing round, propelling its valuation to $5 billion—a 40% increase from its previous $3.6 billion valuation in June. The round was led by General Catalyst, with new investors Dragon Fund and Epiq Capital joining the fold. Existing investors such as StepStone, Lightspeed, DST, and Contrary also participated, further increasing their stakes.
This fresh capital injection adds to Zepto’s robust fundraising efforts, bringing its total to over $1 billion in 2024 alone, and $1.2 billion in the past year. Since its inception, Zepto has raised more than $1.5 billion, solidifying its position as a dominant player in the quick commerce sector.
The company plans to use the new funds to double its network of dark stores to 700 by March 2025, expanding into new markets like Nasik, Chandigarh, Vizag, and Ahmedabad, while also strengthening its presence in existing metro cities.
Zepto co-founder and CEO Aadit Palicha explained the strategic reasoning behind this follow-on financing, emphasizing the value of adding General Catalyst’s Neeraj Arora as a lead investor and the importance of bolstering the company’s balance sheet as it continues to achieve strong growth and operating leverage.
Zepto’s model, which promises delivery of over 10,000 products across various categories within 10 minutes, has attracted millions of customers nationwide. The company is on the verge of reaching EBITDA positivity, boasting a 140% year-on-year growth rate and an annualized gross merchandise value exceeding $1 billion (Rs 8,300 crore). As of May 2024, approximately 75% of Zepto’s stores have achieved full EBITDA positivity.
Despite its rapid revenue growth—14 times higher in FY23, reaching Rs 2,024 crore—Zepto also saw its losses widen to Rs 1,272 crore, reflecting the high costs associated with its aggressive expansion strategy. However, the company’s ability to attract significant investment and its nearly achieved EBITDA positivity suggest a strong potential for future profitability.
