Grocery Delivery Startup Zepto Raises $200m

Zepto, an instant grocery delivery startup, has secured $200 million in its latest funding round, reaching a $1.4 billion valuation. This makes Zepto the first Indian startup to achieve unicorn status this year.

Transaction Details:

  • Lead Investor: StepStone Group led the Series E round, marking its first direct investment in India.
  • Other Participants: Goodwater Capital, Nexus, Glade Brook Capital, and Lachy Groom.
  • Prior Valuation: Zepto was previously valued at $900 million as of May last year.
  • Funding to Date: The company has raised about $560 million in total.

Market Context:

The funding comes as many instant delivery startups, such as Gopuff, Getir, and Instacart, have scaled back operations or shut down. In India, competitor Blinkit sold for less than its raised capital, and Dunzo has reduced its workforce after failing to expand successfully.

Keys to Zepto’s Success:

Co-founder and CEO Aadit Palicha emphasised the importance of supply chain and execution. Zepto processes over 300,000 orders daily across seven Indian cities. The majority of its dark stores are EBIDTA positive, according to Palicha.

Financials & Future Plans:

  • Financial Metrics: Zepto’s annualised revenue exceeds $700 million and has grown 300% YoY.
  • IPO Plans: Zepto aims for an IPO with a positive company-wide EBIDTA within 12 to 15 months.

Co-founder and CTO Kaivalya Vohra stated the company is heavily investing in technology and customer-facing products to improve profitability.

Investment Climate:

The economic slowdown has affected the startup ecosystem in India. Funding has declined by 68% compared to the same period last year, with startups raising just $5.46 billion in H1 2023.

Will Robbins, GP at Contrary, an early backer of Zepto, commended the startup for setting a high standard for investment opportunities.

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