Quick-commerce major Zepto is raising $660 million from existing and new investors at a valuation of $3.62 billion, according to people familiar with the development.

The round will see participation from new investors, including DST Global, Lightspeed Venture Partners, Avenir Growth, and marquee investor Anu Hariharan backed Avra Capital, the sources added.

Existing investors who are doubling down on their investments in Zepto include StepStone Group, Nexus Venture Partners, and Glade Brook Capital, the sources added. The fresh round will more than double Zepto’s valuation to $3.5 billion from $1.4 billion, which underscores investors interest in the quick commerce segment.

The funds will enable the company to rapidly expand its dark store footprint in the top cities amidst the significant surge seen in the quick-commerce segment driven by the grocery segment.

The company did not reply to businessline’s queries.

This large-ticket fundraise comes at a time when late-stage companies are still trying to recover from a funding winter that has gripped the Indian start-up ecosystem since late 2022.

The Y Combinator-backed start-up had last raised $231 million in August 2023 from StepStone Group, Goodwater Capital, and other investors at a valuation of $1.4 billion.

The company said in August that it wanted to deploy the funds to deepen its presence in Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Pune, and parts of Kolkata. He also highlighted that sales have grown 300 per cent year on year, and Zepto was on track to achieve $1 billion in annualised sales within the next few quarters.

Zepto’s competitors

Zepto is also the only pure-play quick commerce company, competing with larger players like Zomato-owned Blinkit, Swiggy Instamart, and Tata’s BigBasket (BB Now).

The latest fundraise by Zepto is being pegged as a pre-IPO round by the start-up, as the company looks to flip back from being domiciled in Singapore to India. “ The company is looking to start preparing to go public in a year’s time,” according to a source.

In April, Swiggy filed its papers for a $1.2 billion IPO through the confidential route with the market regulator SEBI.

The Mumbai-based Zepto also aims to turn EBITDA breakeven by September 2024 as the business matures and its cash burn reduces to a single-digit million (in dollars).

While quick commerce has struggled globally, it has emerged as a $5 billion annual sales channel in India and will only grow further, according to brokerage Goldman Sachs.

Archrival Blinkit-backed by Zomato, said it will grow its dark store count to 1000 by FY25

Zepto, which is among the top three players, does 5.5 lakh orders a day through a network of 340 dark stores across seven cities in India, the company management told Goldman Sachs in April. The firm’s annualised gross order value (GOV) stood at $1.2 billion and has a take rate of 23 percent, analysts at the brokerage said.

Zepto, too, is looking to expand into categories such as medicines and electronics and double down on Zepto Cafe. But the core focus will remain on groceries.

With inputs from Meenakshi Verma Ambwani in New Delhi