Zepto eyes $5 billion valuation in new $310M funding round
Mumbai-based quick-commerce firm, Zepto, is gearing up for a significant funding round of $310 million. This new investment is set to elevate the company's valuation by 40% to an impressive $5 billion. The Economic Times reports that this increase comes just over a month after its previous funding round. The latest investment will push Zepto's total fundraising close to $1 billion in two consecutive rounds since its inception three years ago.
Key investors and funding restrictions
The forthcoming funding round is expected to attract key investors such as Mars Growth Capital, General Catalyst, and other existing investors. Mars Growth Capital is predicted to invest around $50 million while General Catalyst is set to contribute approximately $200 million. The total size of the round could reach up to $350 million with participation from existing investors and some high-net-worth individuals.
Funding terms aim to protect existing investors
As per the reports, the terms of the funding round include a clause that prevents Zepto from raising more than $350 million in another new round within 90 days of the previous one, even at a higher valuation. This provision is designed to safeguard existing investors from dilution of their stakes. As part of this deal, Neeraj Arora, a partner at General Catalyst and former chief business officer of WhatsApp, will join Zepto's board.
Zepto's relocation and IPO plans
Currently based in Singapore, Zepto has plans to move its operations back to India as it prepares for an initial public offering (IPO). The company has previously attracted significant investment from major players such as DST Global, Avenir Growth Capital, Lightspeed Venture Partners, and Avra. In June 2024 alone, Zepto secured $665 million from a group of investors which doubled its valuation to $3.6 billion from $1.4 billion in August 2023.
Zepto's growth and market competition
Over the past year, Zepto's valuation has seen a significant increase of more than three and a half times, driven by the growing demand for quick-commerce services. The latest investment will provide the company with additional resources to compete with larger rivals in the quick-commerce sector, including Zomato's Blinkit, Swiggy Instamart, and Tata Digital-owned BigBasket's BB Now.
