Zepto Raises $665 Million, Valuation Soars to $3.6 Billion Ahead of Potential IPO
Zepto has secured $665 million in its latest funding round, propelling its valuation to $3.6 billion. The round saw participation from new investors Avenir, Lightspeed, and Avra (Anu Hariharan’s new fund), alongside existing backers Glade Brook, Nexus, and StepStone. Additional contributions came from Goodwater and Lachy Groom.
Founded in 2021, the company attained unicorn status last year with a valuation of $1.4 billion after raising $235 million in August 2023. The company’s rapid growth is underscored by its impressive business metrics, including a significant year-on-year increase in Gross Merchandise Value (GMV) exceeding $1 billion. Approximately 75% of the company’s stores have achieved full EBITDA profitability as of May 2024, a stark improvement from previous benchmarks.
Reflecting on Zepto’s growth trajectory, co-founder and CEO Aadit Palicha highlighted the company’s disciplined fiscal approach and ambitious expansion plans. “The accelerated profitability of our stores enables the company to scale rapidly while maintaining EBITDA positivity,” Palicha noted. “We aim to double our store count from 350 to 700, leveraging reinvested capital from mature stores to drive growth. With continued customer satisfaction, we are positioning ourselves for a potential public offering in the near future.”
Co-founder and CTO Kaivalya Vohra emphasized the company’s commitment to enhancing customer experience through innovative projects and expansions like Zepto Pass. “As we enter this new phase, we are focused on scaling our capabilities across engineering, product development, and category management,” Vohra stated. “Zepto offers a high-growth environment where dedication and ambition translate into significant career advancement opportunities.”
The funding round also marks the debut of Avra Capital, a growth equity fund established by Anu Hariharan, former Managing Director of Y Combinator Continuity. Hariharan expressed excitement about partnering with Zepto through Avra Capital, describing Zepto as a transformative force in Indian e-commerce, pioneering the concept of ‘Hyperlocal Amazon’ by integrating competitive pricing with local convenience.
The company’s latest funding round underscores its position as a frontrunner in India’s burgeoning quick commerce sector, setting the stage for further innovation and market expansion ahead of its anticipated IPO.
