Zepto Bags $200M Funding, Claims 2023’s First Unicorn Title with $1.4B Valuation

Image source: TOI

Mumbai-based rapid-commerce delivery startup Zepto has successfully secured $200 million in its Series E funding round, valuing the company at $1.4 billion. This achievement not only makes Zepto the first unicorn of 2023 but also ends an 11-month drought in unicorn startups.

The funding round saw participation from both new and existing investors. StepStone Group, a limited partner in Zepto’s existing investor Nexus Venture Partners, as well as Goodwater Capital joined as new investors. Existing backers like Nexus Venture Partners, Glade Brook Capital, and Lachy Groom also contributed to the funding. Although Zepto didn’t explicitly outline the specific utilization of the raised funds, it did announce its intention to go public by 2025.

Last month, Inc42 provided an exclusive report about Zepto’s entrance into the coveted unicorn club. With this latest funding, Zepto’s total funding across various rounds reaches approximately $560 million. This round marks StepStone Group’s first direct investment in the Indian startup ecosystem, while Goodwater Capital has previously invested in startups like Yellow Class, Pocket FM, Teachmint, and Istanbul-based Gettir.

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Founded in 2021 by Aadit Palicha and Kaivalya Vohora, Zepto seized an opportunity in the growing demand for swift-commerce delivery amid the Covid-19 pandemic. The company gained attention with a $60 million funding round in November 2021 from investors including Glade Brook Capital, Nexus, and Y Combinator.

In the competitive landscape, Zepto faces rivals such as Swiggy’s Instamart, Zomato’s Blinkit, and Reliance-backed Dunzo. Interestingly, this funding comes at a time when Dunzo is finalizing a $100 million fundraise, while Swiggy invested $700 million in Instamart in December 2021, and Zomato acquired Blinkit for $568 million last year.

Addressing concerns about the high operational costs in the rapid-commerce sector, Zepto asserted that it has substantially reduced its burn rate. Additionally, a significant portion of its dark stores are now generating positive EBITDA, highlighting the company’s progress toward sustainability.

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