Zepto IPO plans: Raises $665 million fundraise; valuation goes up to $3.6 billion

Quick Commerce platform Zepto in its biggest funding round this year has raised $665 million, bringing its valuation to $3.6 billion. With this new investors including, Avenir, Lightspeed, and Avra (Anu Hariharan’s new fund), have joined the company’s cap table along with existing investors Glade Brook, Nexus, and StepStone with additional contributions from Goodwater and Lachy Groom.

Zepto Fundraising

This is Zepto's second significant fundraise in 10 months. In August 2023, Zepto achieved the unicorn status with valuation of $1.4 billion after securing $235 million. This funding round also comes as the startup is planning a for an initial public offering (IPO) in 12-15 months and aims to turn profitable before listing.

"We are in a pretty healthy place even with the cash we have in the bank. We look at this funding round more as a pre-IPO financing to build our balance sheet ahead of our upcoming IPO. Having this cash enables us to launch an IPO of meaningful scale," said Aadit Palicha, co-founder and chief executive officer of Zepto.

Zepto's Performance

Zepto's gross merchandise value has multiplied year-on-year to over $1 billion, and around 75 per cent of the company’s stores are fully ebitda positive as of May 2024.

“This dynamic of stores turning profitable faster has enabled Zepto to grow rapidly while achieving near ebitda positivity at a company level. We plan to continue operating with fiscal discipline as we scale from 350 stores to 700 stores by reinvesting the capital generated from mature stores back into the business,” said Palicha, referring to earnings before interest, taxes, depreciation, and amortisation.

Currently, Zepto runs 350 dark storesin top 10 cities and plans to expand into another ten. Dark stores are a retail distribution centre or outlet that serves exclusively to online shopping.

“The most exciting part about this next phase of Zepto’s journey is the major new projects that will 10X customer experience, from launching new categories to expanding initiatives like Zepto Pass. To build out this roadmap, we plan to hire top talent across engineering, product, growth, finance, operations, and category management,” said Kaivalya Vohra, co-founder and chief technology officer of Zepto.

Also watch: Zepto plans to raise $650 million at a valuation of $3.5 billion: Report