Zepto raises $665 million in its second funding round in a year

Zepto raises $665 million in its second funding round in a year
Zepto raises $665 million in its second funding round in a year

Indian startup Zepto announced Friday that it has raised $665 million in a funding round, less than a year after its last fundraising, underscoring strong demand for premium product delivery services. needed in a few minutes.

Zepto, which has been around for three years, was valued at $3.6 billion, a big increase from the $1.4 billion valuation it had in August.

The latest round saw participation from New York-based Avenir Growth Capital and Lightspeed Venture Partners, as well as an initial investment from Avra ​​Capital, a fund launched by Anu Hariharan, a former investor in Y Combinator and ‘Andreessen Horowitz. Some existing investors also participated in the transaction.

The deal strengthens the balance sheet of Zepto, which competes with Zomato-owned Blinkit and Swiggy-owned Instamart in a highly competitive market marked by high investments and thin margins. Flipkart is also reportedly gearing up to enter the fast commerce sector.

Indian customers are increasingly adopting fast commerce services, which have recently expanded beyond groceries to sell mobile phones, tech accessories and gifts, competing with e-commerce giants such as ‘Amazon.com and Flipkart, which is owned by Walmart, and reducing mom-and-pop neighborhood stores.

Goldman Sachs said in April that fast deliveries accounted for $5 billion, or 45%, of India’s $11 billion online grocery market, and was expected to grow to $60 billion. or 70%, by 2030.

Aadit Palicha, co-founder and CEO of Zepto, said the company would use the funds to double the number of its “dark stores,” or warehouses located in high-demand neighborhoods that ship goods, to more than 700 d by March 2025.

The company’s gross merchandise value, the value of all transactions conducted through the platform, grew year-over-year to more than $1 billion, and more than 75% of its dark stores are profitable at the basic operating level, it said.

Zepto had a market share of 28% in January 2024, up from 15% in March 2022, according to HSBC. Blinkit had a 40% market share in January and Instamart had a 32% market share. (Reporting by Yuvraj Malik in Bengaluru; Editing by Shilpi Majumdar)

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