Zepto Raises $665 Million in Series F Funding

Sydney Times

— 2 min read
Zepto Raises $665 Million in Series F Funding

Overview

Zepto, a Mumbai-based startup, has recently secured $665 million in its Series F funding round, more than doubling its valuation to $3.6 billion within a year. The company is focusing on the quick commerce market in India, aiming to provide fast delivery of various items to consumers in urban areas.

Funding Details

  • Led by Glade Brook, Nexus, and StepStone Group
  • Series F round was highly oversubscribed
  • Previous backers such as Avenir, Lightspeed, and Avra also participated
  • DST Global, an early backer of Swiggy, co-led the funding round

Business Model

  • Zepto delivers a wide range of products from groceries to electronics in a short time frame
  • Quick delivery model is thriving in India compared to developed markets
  • Utilizes discreet warehouses known as "dark stores" strategically placed in high-demand areas
  • Planning to expand its dark store network to over 700 by March 2025

Financial Performance

  • Revenue has grown by 140% year-over-year
  • Annualized gross merchandise value (GMV) expected to exceed $1 billion
  • About 75% of dark stores were EBITDA positive as of last month
  • Improved efficiency and scale leading to quicker profitability for dark stores

Market Growth

  • Quick commerce startups in India have shown significant growth
  • Cultural preference for hyper-local buying in India driving the success of quick commerce
  • Quick commerce companies expanding beyond groceries to high-ticket items like smartphones and gaming consoles

Future Plans

  • Zepto focusing on lower-stake purchases like household appliances and cosmetics
  • Operating in top Indian cities and planning to expand to smaller cities
  • Positive reception in cities like Jaipur encouraging further expansion
  • Potential plans for an IPO in the near future

Investor Perspectives

  • Avenir, a New York venture firm, sees Zepto as a promising commerce business
  • Quick commerce companies expected to challenge major e-commerce players like Amazon and Flipkart
  • Goldman Sachs estimates the total addressable market for quick commerce companies in top cities to be around $150 billion

In conclusion, Zepto's recent funding round showcases its potential for growth in the quick commerce space in India. With a focus on fast delivery, expansion of dark store network, and strategic partnerships, the company is poised for continued success in the market.

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