Zepto becomes second unicorn startup of 2023 with $200 mn in latest funding

Quick e-commerce player now valued at $1.4 billion; plans IPO in 12-15 months

Online grocery delivery player Zepto has become the second Indian startup in 2023 to enter the coveted unicorn club with its series E fundraise of $200 million, valuing the company at $1.4 billion, the startup said on Friday.

This comes soon after Web3 startup Zyber 365 raised $100 million in late July, taking its valuation to $1.2 billion. A startup attains unicorn status upon reaching a valuation of $1 billion or more.

Zepto achieved this feat amidst a funding crunch in the Indian startup ecosystem, especially as investors tighten their purse strings for quick delivery platforms such as Dunzo.

Zepto’s latest funding round was led by a new investor - the Stepstone group, while the company’s existing investors doubled down their investments in the firm. It marks StepStone’s first direct investment in an Indian company.

The startup also onboarded another new investor in Goodwater Capital, a California-based consumer-focused venture capital firm.

Furthermore, the quick commerce platform is eyeing a public market listing in early 2025, following a pre-IPO round in the next 12-15 months. The company co-founders - Stanford University dropouts Aadit Palicha and Kaivalya Vohra - currently hold 25-30 per cent ownership of the firm.

Zepto, which was founded in 2021, is currently present in seven geographies and touts a 10-minute delivery timeframe. The company plans to use the fresh capital to penetrate deeper into the existing markets it is present in. “Going deeper into existing markets will not see growth taper off,” co-founder Palicha reasoned, adding that its current serviceable market offers more scope for growth than initially estimated by him.

“The company has grown its sales by 300 per cent year-on-year and will likely achieve $1 billion in annualised sales within the next few quarters,” Zepto noted in its statement. According to Palicha, the platform currently sees $50-60 million in combined sales every month. Additionally, it serves 10,000-plus new customers everyday.

The quick commerce platform, which hosts 200-plus dark stores currently, sees the number surging by 40% in the next year. Based on current metrics, a store turns profitable within 9-12 months of launch, Palicha said. He projected that the firm’s current network of stores will be profitable in the next 12-15 months.

Hinting towards an organic route for the company’s growth, Palicha said: “There is no acquisition opportunity that we’re anticipating in the near future.” Zepto had raised $200 million in its series D funding round in 2022, valuing the company at $900 million.