Zepto India’s first Unicorn in 2023

Zepto India’s first unicorn in 2023; bags $200 million. Zepto raises $200M at $1.4B valuation. Two 20-year-old Indians raise $200 million in fresh funding for Zepto, an instant grocery startup, creating the newest unicorn.

Zepto India’s first Unicorn in 2023

Zepto becomes India’s first 2023 unicorn with $200 million fresh funding. Zepto becomes India’s first unicorn of 2023, raises $200 million at $1.4 billion valuation.

Zepto, an online grocery company, has made history by becoming India’s first unicorn of 2023. The company successfully raised $200 million in a Series E funding round, achieving a valuation of $1.4 billion. This accomplishment has injected optimism into India’s startup ecosystem, which has been grappling with a challenging funding landscape.

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The fundraising effort was spearheaded by StepStone Group, a US-based private market investor, marking its inaugural direct investment in an Indian firm. StepStone Group contributed $75 million to the funding round, according to insiders.

California-based consumer-focused venture capital firm Goodwater Capital also joined as a new investor. Additionally, existing investors, including Nexus Venture Partners, Glade Brook Capital, and Lachy Groom, participated in the round.

Zepto, co-founded in 2021 by Aadit Palicha and Kaivalya Vohra, both Stanford University dropouts, is contemplating a potential public listing within the next two to three years.

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The company currently operates more than 200 dark stores across seven cities, offering a wide range of products from snacks to diapers, notebooks, cooking oil, and cigarettes. In 2022, Zepto secured $200 million in a Series D funding round, led by Y Combinator’s Continuity Fund, valuing the startup at $900 million at that time.

The concept of quick commerce firms gained significant traction following the outbreak of the pandemic. Platforms like Zomato’s Blinkit and Swiggy’s Instamart emerged, offering convenient home delivery of items such as shampoos, soaps, vegetables, and tea, which are typically purchased from local stores.

However, this business model has faced scrutiny due to its high cash burn and competition with readily available local markets.

Aadit Palicha, CEO of Zepto, expressed the company’s commitment to achieving profitability, stating, “We’re going to push even harder towards profitability. The idea is to get to Ebitda positive in the next 12 to 15 months and do it at a scale of well over a billion dollars in sales annually.”

He also revealed plans to expand the number of dark stores by 40% over the next year while focusing on reducing the time it takes for these stores to become profitable. Palicha highlighted the positive trajectory of their dark stores, with a significant portion already achieving profitability.

Zepto prides itself on delivering over 6,000 grocery products within 10 minutes through a network of delivery hubs and dark stores. The average order value typically falls between ₹400 and ₹450.

Zepto’s successful fundraising effort provides a welcome boost to Indian startups, particularly those in the quick delivery space, who have been grappling with a severe liquidity crunch.

For instance, Zepto’s competitor, Dunzo, faced challenges such as deferring employee salaries, as reported by Mint in July.

Frequently Asked Questions (FAQs)

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Official Website: https://www.zeptonow.com/