Zepto in Talks for $300 Million Raise at $2.5-3 Billion Valuation

• ByStartupStory     |    April 2, 2024

Mumbai-based startup Zepto is reportedly in preliminary discussions to secure a substantial raise of at least $300 million from global investors. Sources familiar with the matter have revealed that the proposed funding would potentially value Zepto between $2.5 billion to $3 billion, a significant surge from its last valuation of $1.4 billion when it achieved unicorn status just last year.

According to insider reports on recent investor presentations, Zepto is strategically aiming to achieve positive earnings before interest, taxes, depreciation, and amortization (EBITDA) by September. The company presently boasts an annualized gross sale run-rate of $1.2 billion, Reported ET.

Although plans for the new funding round are still in their early stages, they are anticipated to fortify Zepto’s financial position and provide ample resources to compete with market leaders such as Zomato-owned Blinkit and Swiggy Instamart. Additionally, with Walmart-owned Flipkart poised to enter the quick commerce arena in the coming months, Zepto’s potential cash infusion could bolster its position in the fiercely contested market.

“A variety of global investors, including sovereign wealth funds, are engaged in discussions regarding the new fundraising initiative. The specifics of the fundraising plan will be deliberated upon in an upcoming board meeting later this month,” a source closely associated with the matter disclosed.

Contrary to speculations, Aadit Palicha, the co-founder and CEO of Zepto, has stated that the company is not actively pursuing fundraising endeavors at present. “We recently concluded a substantial funding round, and our primary focus currently lies in executing our operational strategies to achieve EBITDA positivity. Raising capital is not our immediate priority,” Palicha affirmed.

Zepto’s growth trajectory has been impressive, with the company experiencing a surge of over 100% since its last fundraising round in October. Additionally, EBITDA has seen a noteworthy improvement of 600 basis points, reflecting the company’s robust performance in a highly competitive landscape.

As the competition intensifies, industry observers anticipate that players like Zepto will require significant capital infusion to scale up their infrastructure, particularly in the realm of ecommerce expansion. Zomato CEO Deepinder Goyal’s recent assertion regarding the potential of Blinkit as a burgeoning business underscores the significance of strategic investments in the evolving quick commerce landscape.

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