Zepto seeks $300M in fresh funding at nearly $3B valuation
Mumbai-based quick commerce start-up Zepto is reportedly in early-stage discussions for a funding round that could potentially raise at least $300 million from international investors. The company, which achieved unicorn status last year with a valuation of $1.4 billion, is now aiming for a valuation between $2.5 and $3 billion based on current market multiples. This prospective funding round is expected to strengthen Zepto's financial standing and enhance its competitive edge against market leaders like Zomato-owned Blinkit and Swiggy Instamart.
Zepto strives for EBITDA positivity by September
Recent investor presentations reveal that Zepto is working toward becoming EBITDA positive by September. Currently, the company's annual gross sales run-rate stands at a remarkable $1.2 billion. The Economic Times quoted an insider as saying, "Zepto is working toward achieving its EBITDA positive target ahead of schedule." This could improve the company's standing in the forthcoming funding round.
Zepto's expansion plans and e-commerce objectives
Despite achieving a gross sales run rate of $1 billion last month, Zepto has declined a term sheet from at least one growth stage fund. The company has ambitious plans for expansion and broader ecommerce objectives. "Zepto is certainly considering a new funding round and has significant plans regarding the total amount to be raised," The Economic Times reported, quoting a source familiar with the developments.
Zepto's CEO clarifies funding position amid expansion
Despite the fundraising discussions, Aadit Palicha, co-founder and CEO of Zepto, clarified that the company is not actively seeking funds and there are no ongoing discussions with investors. "We concluded a substantial funding round just a few months ago and are on the brink of achieving EBITDA positivity, so our focus is on strong execution rather than raising capital," Palicha stated.
Zepto's remarkable growth and future plans
Palicha highlighted Zepto's impressive growth, stating, "We are growing at a rate of 140% year-on-year, and our mature stores are now generating 6-7% of EBITDA, a figure that could rise to 13-14%. Hence, these stores can generate their own cash." Since its last funding round in October, Zepto's business has expanded by over 100%, and its EBITDA has improved by 6%. Zepto now plans to broaden its product range to include categories such as fashion, jewelry, toys, beauty, and electronics.
