Zepto, India’s leading standalone quick commerce player, has raised $665 million in a funding round, more than doubling its valuation to $3.6 billion. This significant boost sets the stage for intensified competition with rivals like Blinkit, Swiggy Instamart, and BigBasket, all of which are scaling operations rapidly.
The funding round was led by existing investors Glade Brook Capital, StepStone Group, and Nexus Venture Partners. Other existing backers, such as Goodwater Capital and Lachy Groom, also participated. New investors including DST Global, Avenir Growth Capital, Lightspeed Venture Partners, and Avra joined the round, betting on the company founded by Stanford dropouts Aadit Palicha and Kaivalya Vohra. The duo, both aged 22, have now raised $1.2 billion since starting up in 2021.
OrbitShift has attracted around 40% of the new funding from new investors, according to co-founder and CEO Aadit Palicha. Although DST Global was not mentioned in the company’s official statement, sources confirmed its participation.
Palicha highlighted the company’s rapid growth, stating, “We are the fastest-growing Indian company to hit a billion dollars in GMV terms and continue to grow at over 100% year-on-year. Our ability to execute has been crucial in securing this financing.”
Zepto, which became India’s first unicorn in the quick commerce sector last year after raising $235 million at a $1.4 billion valuation, aims to go public next year. Palicha noted, “We see this funding as a balance sheet building exercise ahead of an IPO. We’re not in the business of taking large amounts of money and burning it.”
The company is relocating its domicile from Singapore to India in preparation for the listing, with board approval already in place. Zepto plans to double its dark store count from 350 to over 700 by March 2025, entering new cities such as Ahmedabad, Chandigarh, and Jaipur. Additionally, the team size will expand from over 1,600 to more than 2,000 employees in the coming months.
Currently, 75% of Zepto’s dark stores are profitable on an EBITDA basis. Palicha explained, “A lot of the expansion will be funded by profits from our mature stores. We are reinvesting generated cash back into the business.”
Zepto’s expansion mirrors that of competitors like Blinkit, which aims to operate 1,000 dark stores by the end of the fiscal year, and Swiggy Instamart, with over 500 dark stores. Zepto’s new stores will be slightly larger at around 4,000 square feet, compared to the current 3,500 square feet. The firm’s product assortment has grown from 3,000 SKUs to 10,000 SKUs and will continue to expand.
Quick commerce firms are diversifying into categories such as electronics, beauty and personal care, toys, stationery, and appliances, traditionally dominated by platforms like Flipkart and Amazon. This trend has spurred a rush of funding activity in the sector, with Flipkart expected to launch its own quick delivery service soon. Zomato recently invested Rs 300 crore into Blinkit, and Swiggy filed for a $1.2 billion IPO with market regulator Sebi in April.
Zepto’s substantial funding round and aggressive expansion plans underscore its ambition to lead the quick commerce market, setting the stage for an intense battle among major players.
