June 21, 2024: Indian quick commerce startup Zepto has secured a staggering $665 million in its latest funding round, catapulting its valuation to an impressive $3.6 billion. The funding round was led by Glade Brook, Nexus, and StepStone Group, and it marks a significant milestone for the company.
Zepto, which operates in the burgeoning quick commerce sector, has witnessed exponential growth within a short span. The startup’s unique proposition lies in its lightning-fast delivery of a wide range of products, from groceries to electronics, directly to consumers’ doorsteps. This rapid delivery model has resonated with urban Indian consumers, propelling Zepto to the forefront of the industry.
“This dynamic of stores turning profitable faster and faster has enabled Zepto to grow rapidly while simultaneously achieving near EBITDA positivity at a company level,” Aadit Palicha, Co-founder & CEO, Zepto stated.
Zepto relies on strategically placed dark stores
To achieve its lightning-quick delivery times, Zepto relies on strategically placed “dark stores.” These fulfillment centers, scattered across urban centers, allow the company to efficiently serve customers within minutes. Zepto’s ambitious goal is to expand its dark store network to over 700 locations by March 2025, ensuring even faster deliveries.
Zepto’s revenue has surged by a remarkable 140% year-on-year, underscoring the company’s robust financial performance. Additionally, approximately 75% of Zepto’s dark stores have achieved positive EBITDA, a testament to the company’s operational efficiency.
Zepto faces stiff competition from other players in the quick commerce space, including BlinkIt (owned by Zomato) and Swiggy’s Instamart. These companies also operate dark stores and vie for dominance in the rapidly evolving Indian market. Investors and analysts have been pleasantly surprised by the resilience and growth of quick commerce firms in India, especially given the challenges faced by similar models in other regions.
Looking Ahead
“We plan to continue operating with fiscal discipline as we scale from 350 stores to 700 stores by reinvesting the capital generated from mature stores back into the business. If we are able to achieve this while continuing to delight customers, I believe we will be ready to go public relatively soon,” Palicha added.
With this substantial funding infusion, Zepto is poised to further expand its reach, enhance its technology infrastructure, and continue delighting customers with lightning-fast deliveries. As the quick commerce revolution gains momentum, Zepto’s success story serves as an inspiration for startups aiming to disrupt traditional retail models.
