Zepto, the quick commerce aka 10-minute grocery delivery platform, has become the first Indian unicorn (a privately-held startup company valued at over a billion dollars) of 2023. The startup raised $200 million in fresh funding at a valuation of $1.4 billion.
Zepto said it raised funds from US-based investment firms StepStone Group and Goodwater Capital “in the midst of the deepest downturn in capital markets in over a decade.” Existing backers, including Nexus Venture Partners, Glade Brook Capital, and Lachy Groom, also participated in the deal.
Started by two 19-year-old Stanford dropouts in 2021, Zepto promises grocery delivery in 10 minutes. The company competes with SoftBank-funded Swiggy and Blinkit, which are all betting on fast deliveries in the quick commerce sector. However, CEO Aadit Palicha stated that Zepto has the quickest delivery time of 13 minutes.
Zepto plans to use the raised funds to go deeper into the seven Indian metros it currently serves. The company makes a monthly revenue run rate of $50 million – $60 million from Delhi, Mumbai, and Bengaluru alone.
Despite loss-making, a majority of Zepto’s so-called dark stores—densely located warehouses—generate cash, and the company aims to be profitable in 12-15 months. As per Palicha, the company will consider expanding to new cities after a year. Post May 2022, when it last raised funds, Zepto was valued at $900 million.