Quick commerce startup Zepto has turned unicorn after raising $200 million (about Rs 1,650 crore), overcoming a tight funding environment for startups in the past year.
The Mumbai-based company, founded by Aadit Palicha and Kaivalya Vohra, raised the funds in a Series E round—which usually happens before a startup plans an initial public offering—valuing Zepto at $1.4 billion.
"The fundraise brought in major new investors onto the captable, with the StepStone Group leading the round. Additionally, Goodwater Capital, a consumer-focused venture capital firm based in California, joined the round as a new investor," the company said in a press note.
Existing investors such as Nexus Venture Partners, Glade Brook Capital, Lachy Groom and more also participated in the fundraise.
The fundraise is more of a balance sheet building exercise, said Aadit Palicha, chief executive officer and co-founder of the company. "This takes us to a good capital position pre-IPO."
Palicha laid down the targets for the company's profitability and public listing.
"We aim to be fully Ebitda positive in 12 to 15 months. We've reduced burn significantly and a majority of our dark stores are profitable. Our sales are also growing about 300% year-on-year," he told BQ Prime. Zepto is also likely to achieve $1 billion in annualised sales within the next few quarters.
The pure-play quick commerce company's strategy will be to go deeper in its existing market in India's seven largest cities — Mumbai, Delhi NCR, Bengaluru, Kolkata, Chennai, Hyderabad, Pune. "We want to achieve more efficiency by densifying in these cities and also expand to newer ones."
It is the company's clear ambition to go public in early 2025, Palicha said. "We should definitely be profitable by then and we're confident we'll have a successful public listing. The IPO will provide a partial exit for some of our investors, as well as growth capital for us."
Zepto's burn rate is nearing zero now, and it is running at a monthly revenue rate of anywhere between $50-60 million, he shared. The company's average order value is around Rs 400-450, and it is acquiring north of 10,000 customers a day.
The company is also doubling down on its new segment, Zepto Cafe, while being bullish on groceries, which is its primary offering. "Grocery is the mother of all categories. It is larger than beauty, pharma, fashion electronics, all combined. So we'll always be grocery-first."
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