Zepto Secures $340 Million in Fresh Funding, Reaches $5 Billion Valuation
- ByStartupStory | August 14, 2024
Quick commerce startup Zepto has successfully raised $340 million in a new funding round, which now values the three-year-old company at $5 billion. This latest development highlights the rapid growth of the startup, which has drawn significant interest from investors eager to capitalize on the fast-growing quick commerce space in India.
According to sources, the funding round was initially expected to raise as much as $400 million, but Zepto decided to cap it at $340 million. Of this amount, $250 million is being invested by General Catalyst, with Mars Growth contributing approximately $50 million. The remaining funds will come from Zepto’s existing backers. The round will consist entirely of primary capital, meaning the money is injected directly into the company in exchange for equity.
Zepto’s co-founders, Aadit Palicha and Kaivalya Vohra, both 23 years old, have been praised for their execution skills, which have allowed the company to stand out in a highly competitive market that includes established players such as Blinkit, Swiggy Instamart, and others.
This new funding round comes just weeks after Moneycontrol first reported on July 2 that General Catalyst was interested in investing $250 million as part of a larger $400 million round. This interest followed Zepto’s earlier $665 million fundraising, which was the largest for any startup so far this year.
With the inclusion of the latest funds, Zepto’s total funding has now surpassed $1.6 billion, with $1 billion raised in just the past two months. The company’s valuation has surged from $1.4 billion in August 2023 to $5 billion in August 2024.
“The company is raising money because capital is available right now. The market turns very quickly sometimes so the company is raising while it can,” an investor said, explaining the rationale behind Zepto’s successive fundraises.
Mars Growth’s investment in Zepto marks yet another significant bet in the Indian startup ecosystem, where it already backs companies like Zetwerk and Meesho. For General Catalyst, this investment is its first major move in India since merging with Venture Highway.
Reflecting on the company’s journey at the Moneycontrol Startup Conclave in Bengaluru on August 9, Zepto co-founder Aadit Palicha drew parallels with Amazon’s early days:
“We are where Amazon was in the late 90s, early 2000s. We are sitting on the right macro and the right business model to create something that is very large. And if we execute well, we are sitting on a $50-80 billion outcome,” Palicha said.
“If you want to build a $50-80 billion company you have to take the bull by the horn…It is largely just execution so it is not guaranteed. There were also companies in the past who could have done that but couldn’t execute it,” he concluded.
Zepto’s latest funding round positions the company strongly as it continues to compete against industry giants like Zomato, Swiggy, Walmart, Reliance, and the Tatas in the burgeoning quick commerce sector, which has quickly become a $5 billion market in India. The competitive landscape is only intensifying, with Flipkart also entering the space with its own offering, Flipkart Minutes, to maintain its market share in e-commerce.
Follow Startup Story
Related Posts
