SUMMARY
- Tiger Global conducts due diligence at Zepto’s dark stores, showing interest in the firm’s operations.
- Zepto engages with potential pre-IPO parties to position for future funding and growth.
- India’s quick commerce sector rapidly expands, capturing 50% of the online grocery market share.
According to people aware of this development, Tiger Global, the US Investor is conducting due diligence at Zepto‘s dark stores in Bengaluru, showing a considerable interest in the firm.
As per ET, one of the sources added, “Tiger has been visiting Zepto’s dark stores for a more intricate understanding of operations,”, adding that the New York-based firm is seeing “how it differentiates in execution from others, as well as what’s playing out differently in India compared to global markets.”
Another person with knowledge has said, “The idea is to engage and have a relationship from now on for the next round of funding before an IPO, a typical practice for most late-stage startups.”
One of the above-mentioned sources claims that although Zepto, which collected more than $1 billion in just two months, has not formally started a fresh round, it has engaged in varying degrees with potential pre-IPO parties.
According to a second source with knowledge of the discussions, the fast commerce participant is aware of the additional external due diligence in the market. The source said, “There has been some conversation between the two parties on financial metrics and the current state of the business”.
Aadit Palicha, the CEO of Zepto, declined to comment, and as of Friday press time, an email to Tiger Global had not received a response.
India’s rapid growth in the commerce sector is a noticeable development. According to a senior industry official, “Zomato is already listed, but Swiggy is going public.” Zepto is one of the top three companies where investors can enter at a reasonable price considering its long-term goals and market potential. Several blue-chip companies are now taking rapid commerce seriously as a result of this.
According to the JP Morgan analysis, quick commerce currently makes up nearly half of India’s online grocery spending and is expanding quickly. It also stated that quick deliveries have driven over half of e-grocery shopping over the last six months.
Zepto has had a 3.5-fold increase in its worth in the last 12 months. According to a CLSA analysis released earlier this month, the fast commerce market is expected to expand at a compound annual growth rate of 69% from FY24 to FY27, from $3.8 billion in FY24 to $78 billion by FY34. The report said, “Additions in dark stores, or fulfillment centers, are on the cusp of a rapid acceleration, with unit economics falling into place for the top players, especially Blinkit and Zepto”.
In April, Tiger Global raised $2.2 billion for its most recent venture capital fund. This represents around one-third of its earlier disclosed $6 billion aim to investors, according to a Financial Times report. Aside from SoftBank, Tiger Global is one of the most active investors in the Indian startup scene.
