 "Zepto")
(LR) Kaivalya Vohra, CTO, Zepto and Aadit Palicha, CEO and co-founder, Zepto
Mumbai-based quick commerce company Zepto is expected to raise another $310 million, bringing its valuation to $5 billion – a 40 percent increase from its last funding round just over a month ago, according to a report by The economic times. This new round of funding brings the total capital raised for Zepto, the three-year-old company, to nearly $1 billion in two consecutive rounds.
Zepto funding round could reach $350 million
The upcoming funding round is expected to involve key investors including Mars Growth Capital – jointly managed by Mitsubishi UFJ Financial Group Inc. and Israel’s Liquidity Group – as well as US-based General Catalyst and other existing investors. The report indicates that Mars Growth is likely to invest around $50 million, while General Catalyst could contribute around $200 million. The total size of the round could reach $350 million, with participation from existing investors and some high net worth individuals.
The terms of the financing reportedly include a restriction that prevents Zepto from raising more than $350 million in a new round within 90 days of the previous one, even at a higher valuation. This measure is intended to protect existing investors from dilution of their shares.
Mars Growth Capital, which has previously invested in Indian unicorns such as Zetwerk and Eruditus, is backed by General Catalyst, an investor in Cred. As part of the deal, Neeraj Arora, a partner at General Catalyst and former chief business officer of WhatsApp, will join Zepto’s board of directors.
Preparations for Zepto’s IPO
Zepto, currently based in Singapore, is planning to move to India as it prepares for an initial public offering (IPO). The company has attracted interest from major investors including DST Global, Avenir Growth Capital, Lightspeed Venture Partners and Avra, all of which participated in the June funding round.
In June 2024, Zepto secured $665 million from a group of investors, doubling its valuation to $3.6 billion from $1.4 billion in August 2023. Over the past year, Zepto’s valuation has more than tripled and a half times due to rising demand for quick commerce services.
The latest funding round will give Zepto additional resources to compete with larger rivals in the quick commerce space, including Blinkit, Swiggy Instamart and Tata Digital-owned BigBasket’s BB Now. Blinkit, owned by Zomato, is currently valued at $12-13 billion and plans to expand to 2,000 dark stores by 2026. Zepto, on the other hand, aims to open 700 dark stores by March 2025 to increase its annual gross revenue, which currently stands at around $1.5 billion.
First published: August 12, 2024 | 2:02 p.m. IS
