Funding · Commerce & Consumer Brands

Zepto is raising $500 million for an IPO at a $2.5 billion valuation.

By Startup Enthusiast · 19 April 2024

What they do

Zepto delivers groceries and essentials within 10 minutes across Indian cities

Zepto is raising $500 million to prepare for an IPO, not that it rejected Flipkart's offer to buy a stake in the company

The company rejected a strategic investment from Flipkart, which is launching its own quick-commerce service

Zepto is raising up to $500 million in a new funding round.
The round is led by General Atlantic and sovereign funds including Abu Dhabi Investment Authority (ADIA).
The company has already secured $200 million in internal commitments.
The target valuation is nearly $2.5 billion, almost double its previous $1.4 billion valuation.
Zepto rejected a strategic investment from Flipkart that valued the company under $2 billion.
CEO Aadit Palicha said the company is not open to strategic investors currently.
Flipkart plans to launch its own quick-commerce vertical in July 2024 using dark stores.

The quick-commerce sector in India is projected to reach $34 billion in gross merchandise value by FY29, per a UBS report.
UBS noted the sector has shifted from 'good to have' to 'indispensable' for consumers.
Zepto is near EBITDA positive and has a strong financial position, giving it leverage in fundraising.

Zepto delivers groceries and everyday essentials within 10 minutes.
It operates in multiple Indian cities through a network of dark stores (small warehouses for quick packing).
The company makes money by charging a delivery fee and a markup on products compared to retail prices.
It competes with Blinkit (owned by Zomato) and Swiggy Instamart in the quick-commerce space.
Zepto has raised over $500 million in total funding before this round.

Zepto plans to use the new capital to expand its dark store network and improve delivery speed.
The company aims to achieve profitability in the near term.

General Atlantic (lead) — A global private equity firm that invests in growth companies.
Abu Dhabi Investment Authority (ADIA) (participated) — A sovereign wealth fund from Abu Dhabi that invests globally.

Product: A rapid-delivery app for groceries and everyday essentials.
Customers: Consumers ordering groceries and essentials online.
How it makes money: It earns from product margins, delivery fees, and order-value thresholds across its quick-commerce network.
What sets it apart: It was built as a quick-commerce native company from day one.
Operations: Operates dark-store based 10-minute delivery across multiple Indian cities.