(L-R) Kaivalya Vohra, CTO of Zepto, and Aadit Palicha, CEO and co-founder of Zepto
Mumbai-based fast-trading company Zepto is set to raise an additional $310 million, which would take its valuation to $5 billion, a 40 percent increase from its last funding round just over a month ago, according to a report by The Economic Times. This new round of funding will bring Zepto’s total fundraising to nearly $1 billion across two successive rounds for the three-year-old company.
Zepto’s funding round could reach $350 million
The upcoming funding round is expected to involve key investors including Mars Growth Capital (co-managed by Mitsubishi UFJ Financial Group Inc and Israel’s Liquidity Group), along with US-based General Catalyst and other existing investors. The report said Mars Growth is likely to invest approximately $50 million, while General Catalyst could contribute around $200 million. The total size of the round may reach $350 million, with participation from existing investors and some high-net-worth individuals.
The funding conditions reportedly include a restriction that prevents Zepto from raising more than $350 million in a new round within 90 days of the previous one, even at a higher valuation. This measure is designed to protect existing investors from dilution of their stakes.
Mars Growth Capital, which has already invested in Indian unicorns such as Zetwerk and Eruditus, will join General Catalyst, an investor in Cred. As part of the deal, Neeraj Arora, a partner at General Catalyst and former chief business officer at WhatsApp, will join Zepto’s board of directors.
Preparations for Zepto’s IPO
Currently based in Singapore, Zepto plans to move to India as it prepares for an initial public offering (IPO). The company has attracted interest from major investors including DST Global, Avenir Growth Capital, Lightspeed Venture Partners and Avra, all of whom participated in the June funding round.
In June 2024, Zepto raised $665 million from a group of investors, doubling its valuation to $3.6 billion from $1.4 billion in August 2023. Over the past year, Zepto has seen its valuation increase by more than three and a half times, driven by rising demand for fast trading services.
The latest round of funding will provide Zepto with additional resources to compete with larger rivals in the fast-commerce space, including Tata Digital-owned Blinkit, Swiggy Instamart and BigBasket’s BB Now. Zomato-owned Blinkit is currently valued at $12-13 billion, with plans to expand to 2,000 dark stores by 2026. Zepto, for its part, aims to set up 700 dark stores by March 2025 as it looks to increase its annualized gross sales run rate, which currently stands at around $1.5 billion.
First published: August 12, 2024 | 14:02 IS
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.