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Quick-commerce player Zepto has raised $200 million in a Series E round at a valuation of $1.4 billion led by US asset management firm StepStone Group, along with Goodwater Capital and some existing investors.
After this round, Zepto is the first unicorn or startup valued at over $1 billion, to be minted in India this year.
Its existing investors, like Nexus Venture Partners, Glade Brook Capital, Lachy Groom and others have doubled down in Zepto with meaningful follow-on investments.
Zepto cofounder and chief executive Aadit Palicha said that the company will primarily use the funds to invest in growth. He said that at the company level, they are eyeing to be EBITDA positive in the next 12-15 months.
He also added that Zepto is planning to expand its presence in existing markets, and also aims to invest more in its add-on offerings such as Zepto Cafe, a cloud kitchen setup in its existing dark stores, which delivers beverages and snacks in 10 to 20 minutes.
Route to IPO
Zepto’s co-founder Palicha added that the company may look to go public in early 2025, and it wants to remain EBITDA profitable for about three quarters before hitting the public markets.
It raised money this year even as most of the capital from the previous round, also $200 million, still sits in its bank accounts, he added.
The startup had last raised $200 million in May 2022, at a valuation of $900 million.
“In 12 months, when we get to EBITDA-positive, we will not need to spend a significant amount of this money. After EBITDA-positive, we’ll do a pre-IPO round. This was our last growth equity round and was done just to build our balance sheet,” Palicha said.
The firm, which is currently operational in seven cities, runs about 200 dark stores. It plans to increase its store count by about 40 per cent by the end of the current financial year. Palicha added that Zepto has reduced significantly.
It has grown its sales by 300 per cent year-on-year and will likely achieve $1 Billion in annualised sales within the next few quarters. Its average order value is in the range of ₹400 to ₹470.
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.
“Grocery is the mother of all categories and our idea is to keep going deeper and deeper into it…the easiest thing is to keep adding stores and SKUs, but it’s more important to go deeper and deeper with the same locations… so tomorrow, when you turn on customer acquisition, the fundamentals are already strong,” he said.
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