Zepto in Talks for Another Fundraise at a Valuation of $4.6 Billion: Report
- ByStartupStory | June 26, 2024
Quick commerce unicorn Zepto is reportedly in discussions to raise an additional $400 million at a valuation of $4.6 billion, merely a week after securing $665 million in funding, according to The Information.
The new funding round comes shortly after Zepto’s previous round, which valued the company at $3.6 billion. The previous round was co-led by DST Global and Avra, with participation from Avenir and existing investors such as Nexus Venture Partners, StepStone Group, Contrary, and Glade Brook Capital.
Zepto’s Co-founder and CEO, Aadit Palicha, shared the company’s optimistic outlook, stating that Zepto expects to cross $1.5 billion in annualised sales next month. He highlighted that the company is currently generating an annualised gross profit at a $300 million rate based on its current monthly profit.
“If we are able to achieve this while continuing to delight customers, I believe we will be ready to go public relatively soon,” Palicha said.
Earlier reports indicated that Zepto’s GMV (gross merchandise value) has multiplied year-on-year to exceed $1 billion. Additionally, it was reported that nearly 75% of the company’s stores, dark stores, or warehouses achieved full EBITDA positivity as of May 2024. This level of profitability, which previously took nearly two years to reach, is now being achieved within just six months. Zepto is on the brink of EBITDA positivity with 140% year-over-year growth on a base of $1 billion annualised GMV.
The company plans to operate with “fiscal discipline” as it scales from 350 stores to 700 stores by reinvesting the capital generated from mature stores back into the business.
Zepto’s fundraise arrives at a time when other foodtech and ecommerce startups are placing significant emphasis on quick commerce as a primary growth driver. Zomato, for instance, anticipates that the number of monthly transacting users (MTUs) on its quick commerce platform, Blinkit, will soon surpass its parent company’s figure. Zomato’s quarterly earnings report also revealed plans to increase the number of dark stores to 1,000 by March 2025.
Meanwhile, Swiggy, which has already filed for its IPO, is focusing on profitability and expansion. The company has introduced additional revenue streams through restaurant advertising and platform fees. Investors are optimistic about Swiggy’s growth, driven by the increased penetration of its quick commerce business, higher order values, and organic customer growth.
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