Quickcommerce

DST Global and Lightspeed Venture Partners to Join Zepto’s Ongoing Fundraise: Report

• ByStartupStory     |    June 12, 2024

DST Global and Lightspeed Venture Partners are set to participate in quick commerce unicorn Zepto’s ongoing fundraising round, according to a report by The Economic Times. The round, nearing completion, is expected to raise $300 million to $350 million, potentially valuing the company at around $3 billion. Zepto, along with DST Global, Lightspeed Venture Partners, and Nexus Venture Partners.

The latest funding round will also see participation from a set of private equity funds and existing backers, including Nexus Venture Partners. Last August, Aadit Palicha-led Zepto raised $200 million, which took its valuation to $1.4 billion. The round saw contributions from existing investors Nexus Venture Partners, Glade Brook Capital, and Lachy Groom, while StepStone Group and Goodwater Capital joined as new investors. The company used these funds to expand its presence in Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Pune, and parts of Kolkata.

Palicha had announced the company’s expectation to hit EBITDA-level profitability within the next 12-15 months and highlighted that sales had grown 300% year on year. Zepto was on track to achieve $1 billion in annualised sales within the next few quarters.

Investors remain optimistic about the feasibility of quick commerce startups despite high cash burn. According to Baron Capital, there is immense scope for scaling in India’s food delivery industry due to factors such as a growing middle class, rising disposable income, and higher smartphone penetration. Swiggy has confidentially filed draft IPO papers for a $1.25-billion public listing, and the company’s valuation rose to $15.1 billion after Baron Capital marked up the value of its stake in the company to $109.16 million from its original investment of $76.77 million.

Zepto is also planning to float an initial public offering (IPO) by early 2025. According to media reports, Zomato will invest Rs 300 crore in its quick commerce unit Blinkit as it ramps up its offerings in the face of stiff competition from Zepto and Swiggy’s Instamart. In its latest quarterly earnings, Zomato announced that Blinkit had turned EBITDA positive in March 2024 and outlined plans to expand its quick commerce operations in FY25.

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