Zepto’s latest fundraising came in two phases, with the first round of $665 million closing on June 21 and the second round of $340 million on August 29. The quick commerce startup raised the fresh $340 million in a round led by General Catalyst, with new investors Dragon Fund (Mars Growth Capital) and Epiq Capital participating. Existing investors, including StepStone, Lightspeed, DST, and Contrary, also increased their stakes by injecting additional capital.
Zepto’s valuation has soared to $5 billion, a significant leap from $1.4 billion in August 2023, driven by consecutive funding rounds and rapid growth. Over the past two months, Zepto has raised a remarkable $1 billion as investors continue to back the burgeoning quick commerce market in India. Founded just three years ago, Zepto competes with major players like Zomato-owned Blinkit, Swiggy Instamart, Flipkart Minutes, and Tata’s Big Basket. It has emerged as a strong contender, thanks to its execution capabilities and swift expansion.
In total, Zepto has raised $1.05 billion in two months across two tranches, bringing its total funding to approximately $1.5 billion since its inception in 2021. Discussing the rationale behind raising such a large amount in quick succession, Zepto co-founder and CEO Aadit Palicha highlighted two key reasons.
“First, the opportunity to bring on board a lead investor of Neeraj Arora’s caliber from General Catalyst was one we couldn’t pass up,” Palicha said. Arora, co-founder of Venture Highway and former Chief Business Officer of WhatsApp, joined General Catalyst as it seeks to deepen its presence in India. He has also served on Paytm’s board and spent several years at Google.
“Second, strengthening our balance sheet is a strategic move, especially as the company continues to deliver strong growth and operating leverage. While the recent financing reflects strong confidence in Zepto’s performance to date, we recognize there is still a lot of execution ahead to fulfill our ambition of building a world-class internet company out of India,” Palicha added, noting the company’s plans for a public market debut in the next 12-18 months.
Palicha has previously drawn comparisons to Amazon, suggesting that Zepto could achieve a $50-80 billion outcome if the management executes effectively.
Neeraj Arora, Managing Director of General Catalyst, praised the young founders, stating, “Aadit and Kaivalya are exceptional founders who have turned their bold mission to modernize India’s grocery sector into a category-defining company. Their long-term vision to reimagine and build an enduring supply-chain company is currently manifested as a quick commerce play.”
General Catalyst has previously announced plans to invest between $500 million and $1 billion in India over the coming years and is also close to launching a new $6 billion fund for tech startups globally. Mars Growth Capital, a joint venture between Mitsubishi UFJ Financial Group (MUFG) and Liquidity Group, also participated in this round through its Dragon Fund I, which has already backed companies like Meesho in India.
“Quick commerce addresses the convenience, variety, and value needs of urban India, which is a massive opportunity,” said Aakash Tulsani, Managing Director at Dragon Fund. “We have been impressed by Zepto’s execution, data-driven approach, and ambition to build an enduring company.”
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