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Zepto, a quick commerce grocery delivery app, today announced it has raised $60 million in a funding round led by Glade Brook Capital, a US-based investment fund, at a post-money valuation of $225 million.
The round was also joined by venture capital firm Nexus Venture Partners and Silicon Valley's Y Combinator, as well as prominent angel investors such as WhatsApp's former Chief Business Officer Neeraj Arora. Glade Brook Capital is a venture capital firm that invests in US grocery startups such as Instacart and Good Eggs.
Zepto, which was founded by Aadit Palicha and Kaivalya Vohra, promises to deliver groceries in 10 minutes. The startup is entering the quick commerce space — defined as delivery in less than 45 minutes — at a time when other well-funded and larger startups, such as Swiggy, Grofers, Dunzo, and BigBasket, are also doubling down on the sector.
It operates out of its own network of 'cloud stores' or micro-warehouses to fulfill orders on time. Zepto was founded in September 2020 and began offering services in April of this year.
According to a statement, The funds will be primarily be used to increase the number of dark stores in newer cities, expand its customer base, and hire more employees. The service is currently available in Bengaluru and the Delhi-National Capital Region, and be available in Hyderabad, Chennai, Pune, and Kolkata within the next 30 days, it said.
The startup expects to open 100 dark stores by the end of the year, serving approximately 100 pin codes.
Zepto currently has 300 corporate employees (excluding warehousing personnel) and plans to quadruple that number in the coming months. Palicha stated that the service's revenue was increasing by 200 percent month over month, but he did not provide specific figures. According to him, the average delivery time for Zepto is about eight minutes.
“Q-Commerce in India is an opportunity of epic proportions and strong unit economics. We’ve been ignoring the noise and executing heads-down for a long time to perfect this model, and our efforts are paying off. Today, we’re consistently growing 200 percent every single month, with an unstoppable team, robust product infrastructure, and deep access to institutional capital," Aadit Palicha, Founder and CEO, Zepto, said.
“Quick ecommerce is poised to transform shops around the world. Zepto has emerged as a leader in India, with exponential growth and best-in-class execution. We look forward to partnering as Zepto brings a magical consumer experience across India,” said Paul Hudson, CIO at Glade Brook Capital.
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