Zepto in talks to raise another $310 million in funding at $5 billion valuation: Report

Zepto appears to be in non-stop fundraising mode, as a new report suggests that the 10-minute grocery delivery unicorn is in talks to raise an additional $310 million at a much higher valuation.

According to an ET report, the Aadit Palicha-led startup aims to reach a $5 billion valuation with this funding round, which could see participation from investors, including Mars Growth Capital—co-managed by Mitsubishi UFJ Financial Group Inc and Israel’s Liquidity Group—alongside US-based General Catalyst and other existing investors.

In late June, US-based publication The Information reported that Zepto in talks to raise around $400 million at a post-money valuation of $5 billion.

Funding round may reach $350 million

The report also said that the funding round could reach $350 million, with participation from existing investors and HNIs.

However, under the terms of the previous funding round, Zepto is restricted from raising more than $350 million within 90 days, even at a higher valuation, to protect existing investors from stake dilution.

If this new funding round goes through, it would bring Zepto's all-time raise to around $1.5 billion.

Zepto's previous funding

The report comes nearly two months after Zepto raised $665 million from a group of investors, doubling its valuation to $3.6 billion from $1.4 billion in August 2023.

The last round was co-led by Glade Brook, Nexus, and StepStone Group. 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, were also the participants in the round.

A highly competitive market

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 including Bengaluru, Chennai, Delhi, Ghaziabad, Gugaon, Hyderabad, Kolkata, Mumbai, Noida, and Pune.