Instant grocery delivery startup Zepto has achieved a remarkable feat by securing a staggering $200 million in its latest funding round, elevating its valuation to an impressive $1.4 billion. This substantial funding places Zepto in the esteemed category of unicorns—a term used to describe startups valued at $1 billion or more. What sets Zepto apart is its ability to thrive in a sector that has posed challenges for many of its peers.
StepStone Group Leads Series E Funding
StepStone Group, a prominent Limited Partner (LP) with a significant presence in various venture funds including Nexus Venture Partners, took the lead in Zepto’s Series E funding round. This marks StepStone Group’s first direct investment in India. Notably, existing investors including Goodwater Capital, Nexus, Glade Brook Capital, and Lachy Groom also participated in this round.
Zepto’s Impressive Valuation Surge
Zepto’s valuation has experienced a remarkable surge, progressing from its last valuation of $900 million in a funding round revealed in May of the previous year. With approximately $560 million raised to date, Zepto’s Series E funding did not involve any secondary transactions, as confirmed by Zepto co-founder and CEO Aadit Palicha.
Uniqueness in an Industry Facing Challenges
Zepto’s success comes at a time when the landscape for instant delivery startups has been tumultuous globally. Many major players such as Gopuff, Jokr, Getir, Gorillas, and Instacart have either downscaled operations, witnessed plummeting valuations, or ceased operations altogether. Zepto’s resilience stands in stark contrast to these challenges.
Execution and Discipline Drive Zepto’s Success
Aadit Palicha, Zepto’s co-founder and CEO, attributes the startup’s triumph to the meticulous execution of its supply chain operations. In his words, “The high-level elements that people keep throwing — existence of deep-pocketed competitors, who all is on the cap table etc. — don’t matter. What matters is the basis point by basis point execution and discipline with which you are governing every inch of your supply chain.”
Zepto’s Background and Growth Trajectory
Founded by Aadit Palicha and Kaivalya Vohra at the age of 19, Zepto emerged from stealth mode in November 2021. The startup, which offers a range of products from groceries to electronics, processes over 300,000 daily orders across seven Indian cities. Zepto’s utilization of strategically placed dark stores across cities has contributed to its operational efficiency.
Aiming for Profitability and Future Prospects
Despite industry challenges, Zepto’s determination has led to a significant reduction in its expenses. The startup aims to achieve company-wide EBIDTA positivity in the next 12 to 15 months, positioning it for a potential Initial Public Offering (IPO) by 2025. With an annualized revenue sales exceeding $700 million and a 300% year-on-year sales growth, Zepto is targeting a $1 billion annualized sales milestone in the near future.
Investor Confidence Amid Economic Slowdown
Zepto’s funding achievement is particularly notable given the economic slowdown that has impacted investor sentiment. Amid a substantial decline in funding for Indian startups in the first half of 2023, Zepto’s success shines brightly. The startup’s ascent to unicorn status showcases its ability to stand out even in challenging economic times.
Zepto’s Inspiring Path Forward
With its unwavering focus on execution, disciplined supply chain management, and impressive growth trajectory, Zepto sets the stage for a future marked by innovation and profitability. As the first Indian unicorn of the year, Zepto’s journey stands as a testament to the power of effective execution and strategic vision in the dynamic world of startups.
