The rapidly growing instant grocery delivery company Zepto raised $665 million at a valuation of $3.6 billion. This funding round saw new investors like DST Global, Avenir, Lightspeed, and Avra (a fund started by Anu Hariharan) join the company. Existing investors Glade Brook, Nexus, StepStone, Goodwater, and Lachy Groom added more money.
Zepto, which provides instant grocery delivery, is attracting investors who are eager to invest in the fast-growing quick commerce sector in India. This significant funding comes when investors are being more careful about which startups they support due to the scarcity of available capital.
Zepto’s Rapid Growth and Future Plans
Zepto’s business performance has been strong, with its gross merchandise value (GMV) growing to over $1 billion. About 75% of Zepto’s stores were profitable by May 2024, a big improvement since stores reached profitability in just six months compared to 23 months before.
Zepto, based in Mumbai, plans to use its recent funding to expand into new markets such as Jaipur, Chandigarh, Ahmedabad, and others. Additionally, they aim to increase their presence in current cities like Mumbai, Delhi, and Bengaluru. By March 2025, Zepto aims to double its number of dark stores from 350 to over 700. This expansion strategy aligns with similar moves by other companies in the sector. For instance, Blinkit, owned by Zomato and a market leader, plans to open 1,000 stores by the same timeframe.
In this competitive landscape, Zepto competes with other major players like Swiggy Instamart, Tata’s BigBasket (BB Now), and Blinkit, all vying for dominance in the quick commerce space.
Co-founder and CEO Aadit Palicha highlighted that this faster profitability has allowed Zepto to grow quickly while nearly breaking even on an EBITDA basis. The company plans to grow from 350 to 700 stores by reinvesting profits from mature stores. Palicha believes that if they keep customers happy and maintain financial discipline, Zepto could go public soon.
Zepto’s Co-founder and CTO Kaivalya Vohra Hiring Goals
Zepto’s Co-founder and CTO, Kaivalya Vohra, shared exciting news about the company’s future. Zepto is planning major new projects to greatly enhance the customer experience, including launching new product categories and expanding services like Zepto Pass.
Zepto intends to hire top talent in various fields, including engineering, product development, growth, finance, operations, and category management, to support these ambitious plans. Vohra emphasized that Zepto offers a high-growth environment with a culture of meritocracy and intensity. For hardworking and ambitious people, Zepto provides an opportunity for significant career growth.
Avra Capital’s Launch and First Investment in Zepto
The recent funding round for Zepto also marks the official launch of Avra Capital, a growth equity fund established by Anu Hariharan, the former Managing Director of Y Combinator Continuity. Zepto is the first global investment for Avra Capital.
Anu Hariharan expressed excitement about partnering with Zepto again, this time through her new fund, Avra. She highlighted that Zepto is more than just a 10-minute quick commerce company. According to Hariharan, Zepto is revolutionizing Indian e-commerce by creating a “Hyperlocal Amazon,” offering affordable prices and local convenience.
Zepto is Moving Domicile to India
According to Aadit Palicha, Zepto, currently based in Singapore, is in the process of shifting its headquarters back to India. This transition is expected to be completed within the next few months.
Zepto is not alone in this move; several other large companies, such as Flipkart, Meesho, Groww, Pine Labs, Razorpay, and Udaan, are also looking to domicile in India. They are moving away from countries such as the US and Singapore in preparation for potential public listings in India in the future.
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