Zepto hits $5 billion valuation as it closes $340M round
Zepto, an Indian quick commerce start-up, has successfully secured $340 million in a Series G funding round. This latest investment has elevated the company's valuation to an impressive $5 billion. The funding round was jointly spearheaded by General Catalyst and Mars Growth Capital. This significant increase follows a valuation of $3.6 billion in June and $1.4 billion last August, highlighting the company's rapid growth within a year.
Zepto's quick commerce model challenges traditional e-commerce
Zepto operates in the quick commerce sector, offering a wide range of products from groceries to electronics with delivery times in minutes. The start-up is a strong competitor for BlinkIt, owned by Zomato, and Swiggy's Instamart in India's burgeoning quick commerce market. This emerging sector is gradually challenging traditional e-commerce giants like Amazon India, which has been operating for about 10 years and invested over $7 billion in its e-commerce business in the country.
Quick commerce firms' growth surprises investors
Quick commerce firms have seen substantial growth in recent years, despite similar business models failing in other markets. These companies operate numerous "dark stores" or discreet warehouses across urban India, enabling them to fulfill orders within minutes. The success of this model has taken many investors and analysts by surprise, especially given the slow adaptation of established e-commerce players to these changing consumer habits.
Zepto's expansion and profitability plans
Zepto plans to expand its network of dark stores to over 700 by March 2025. The company reported a 140% revenue increase from the previous year in June, and currently collaborates with more than 50,000 delivery partners, adding over 5,000 agents each month. As of July, about 75% of Zepto's dark stores were EBITDA positive due to improved efficiency and scale that have reduced the time for a dark store to achieve profitability from 23 months to six months.
