Zepto in talks to raise $400 million just five days after raising $665 million, says Report

Mumbai-based quick commerce unicorn Zepto is reportedly in talks to raise another $400 million at a post-money valuation of $5 billion, according to a report by the US-based publication The Information.

Just five days earlier, the startup raised a massive $665 million at a post-money valuation of $3.6 billion.

Glade Brook, Nexus, and StepStone Group co-led the round. Other significant investors include Avenir, Lightspeed, Avra (a new fund by Anu Hariharan), Goodwater, Lachy Groom, and Contrary. DST Global, an early backer of Swiggy, another major player in the quick commerce space, also participated in the round.

Zepto's market presence

Founded in 2021 by Stanford dropouts Kaivalya Vohra and Aadit Palicha, Zepto operates in the highly competitive quick commerce market, delivering groceries, household items, and electronic accessories to urban Indian consumers within minutes. 

The startup uses a network of "dark stores"—small warehouses located close to high-demand areas. This allows the three-year-old startup to ensure swift delivery times.

Currently, It has over 50,000 delivery partners, adding about 5,000 new partners each month, and plans to expand its dark store network to 700 by March 2025.

At present, Zepto has around 350 dark stores in 10 cities, including Bengaluru, Chennai, Delhi, Ghaziabad, Gurgaon, Hyderabad, Kolkata, Mumbai, Noida, and Pune.

Currently, It has over 50,000 delivery partners, adding about 5,000 new partners each month, and plans to expand its dark store network to 700 by March 2025.

On the other hand, Blinkit is also aiming to expand its dark-store network to 1,000 by March 2025 from 526 as of March 2024. Swiggy has 487 dark stores. 

Expects to reach $1.5 billion in GMV

According to the report, Zepto expects to reach $1.5 billion in annualized gross merchandise value (GMV) by next month and is generating $300 million in annualized gross profit. This is higher than the $1.1 billion in annualized GMV reported in March, which was the basis for the latest round's valuation. 

Zepto is also comparing its valuation to the rapid growth in the market capitalization of Zomato, which owns the quick-commerce platform Blinkit. 

In April, Goldman Sachs valued Blinkit at $13 billion out of Zomato’s $21 billion market capitalization. Blinkit is the largest player in the space, followed by Swiggy-owned Instamart, with Zepto in third place.

Earlier this month, It was reported that Zomato is infusing Rs 300 crore in Blinkit.