Quick commerce unicorn Zepto which recently raised $665 million at a valuation of $3.6 billion, is likely to go for another round of fund raise of $250 million on the back of investor interest. Sources said that the fresh round is likely to be at a higher valuation of $4.6 billion and the fund raise may even touch $400 million.
The round is likely to see General Catalyst coming on board as an investor, sources said. Sovereign funds such as KKR, Singapore’s GIC and Abu Dhabi Investment Authority (ADIA), are also understood to have shown interest, sources added.
While Zepto said it doesn’t comment on market speculation, General Catalyst, ADIA, KKR and GIC could not be contacted for comments.
The last round of fund raise of $665 million, which happened on June 21, was at a valuation of $3.6 billion, which was more than double of $1.4 billion, when the firm had last raised $200 million in August, 2023 led by US asset management firm StepStone Group.
The interest shown by investors in Zepto comes at a time when the industry continues to see muted number of deals and smaller cheque sizes for growth-stage companies.
The June 21 funding round was led by existing investors Glade Brook Capital, StepStone Group, and Nexus Venture Partners, while other existing investors Goodwater Capital and Lachy Groom also participated. New investors like DST Global, Avenir Growth Capital, Lightspeed Venture Partners, and Avra had also joined the round.
Aadit Palicha, co-founder and CEO of Zepto, had said that around 40% of the fresh funds had come from new investors.
According to analysts, Zepto, which is the country’s only standalone quick-commerce player, is set to raise the bar in this highly competitive segment, with rivals like Zomato-owned Blinkit, Swiggy Instamart, and Tata Group’s BB Now, all of whom are also scaling up their operations.
Zepto had said that it will use the money to enter 10 new markets including Jaipur, Chandigarh, Ahmedabad and others while also doubling down on existing cities, where it has presence like Delhi, Chennai, Gurgaon, Bengaluru, Mumbai and Hyderabad.
Zepto currently enjoys a market share of 28%, as per a recent HSBC report, while Blinkit leads the market with a near 40% share and Instamart’s market share has declined to 32% as of January this year, from 36% last year and 52% in 2022.
Both Instamart and current market-leader Blinkit operate in 25-30 cities across India, while Zepto is present only in 10 cities. If only metros are considered, Zepto has the second-highest market share of 32%, after Blinkit at 37%.
Zepto has seen a rapid rise in its gross merchandise volume (GMV) over three years and currently has a GMV run-rate of $1.2 billion, doubling every year. Meanwhile, its sales have crossed Rs 2,000 crore in FY23. However, concerns around its burgeoning losses remain. In FY23, it had posted losses of Rs 1,272 crore.
