By M. Sriram
MUMBAI (Reuters) -Indian grocery startup Zepto said on Friday it has raised $200 million in fresh funding at a valuation of $1.4 billion, making it the first startup in the country to cross the billion-dollar valuation mark in nearly a year.
Zepto said it raised the funds “in the midst of the deepest downturn in capital markets in over a decade” from U.S-based investment firms StepStone Group and Goodwater Capital. Existing backers including Nexus Venture Partners, Glade Brook Capital and Lachy Groom also participated in the deal.
Zepto, which promises delivery of groceries in 10 minutes, was started in 2021 by two 19-year-old Stanford dropouts, and competes with SoftBank-funded Swiggy and Blinkit, which are all betting on fast deliveries in the so-called quick commerce sector. Even among them, Zepto’s CEO Aadit Palicha said the company has the quickest average delivery time of 13 minutes.
Zepto’s rival Swiggy plans to list in India’s stock market next year, Reuters reported.
Zepto plans to use the funds to go deeper into the seven Indian metros it is currently present in, including Delhi, Mumbai and Bengaluru, where it makes a monthly revenue of $50 million-$60 million, Palicha told Reuters.
“Operating in a bear market has forced us to be more disciplined. There is no (question of) growth or profit, it has to be both.” The company is also planning an initial public offering in 2025, he said, without giving further details.
While Zepto is still loss-making, a majority of its so-called dark stores – densely located warehouses – generate cash and the company aims to be profitable in 12-15 months, it said.
The company will consider expanding to new cities after a year, Palicha said.
Zepto was valued at $900 million when it last raised funds in May 2022. A company statement said it has tripled sales year-on-year and will achieve $1 billion in annualised sales in the next few quarters.
Investment bank Avendus advised Zepto on its current fundraising round.
(Reporting by M. Sriram; Editing by Sonia Cheema)