6 Billion Valuation

Mumbai-based quick commerce company Zepto is set to double its dark stores across India, aiming to reach 700 stores by March 2025. This expansion plan comes after the company achieved a valuation of $3.6 billion from its latest funding round, marking a significant increase from its previous financing round.

Founded in 2021 by Aadit Palicha and Kaivalya Vohra, both of whom gave up places at Stanford University, Zepto started as a grocery delivery service. However, it has since diversified its offerings to include apparel, toys, and other products, becoming one of India's largest players in quick commerce.

Zepto's success can be attributed to the profitability of its stores. As of May, approximately 75% of its warehouse outlets are already making an operating profit. The company stated that the time it takes for a store to become profitable has decreased from 23 months to just six months. This trend has allowed Zepto to rapidly expand while maintaining near EBITDA positivity at a company level.

Palicha, Zepto's cofounder and CEO, emphasized the company's commitment to fiscal discipline while scaling its operations. He explained that capital generated from mature stores will be reinvested back into the business.

Looking to the future, Palicha stated that if the company's momentum continues, Zepto will be ready to go public relatively soon. This indicates potential plans for an Initial Public Offering (IPO).

Zepto recently announced its latest funding round, raising $665 million from new investors such as Avenir, Lightspeed, and Avra. Existing investors, including Glade Brook Capital Partners, Nexus, and StepStone Group, also participated in the funding round. This financing comes just nine months after the company raised $235 million in a previous round, achieving a valuation of $1.4 billion.

The praise for Zepto's achievements has been echoed by industry insiders. Paul Hudson, Chief Investment Officer of Glade Brook, commended the company's strong product-market fit, world-class execution, and innovation, stating that Zepto is redefining e-commerce in India.

With their expanding network of dark stores and promising financial performance, Zepto's future in the quick commerce industry looks promising. As the company continues to attract significant funding and achieve remarkable valuations, it is likely to further solidify its position as a key player in India's e-commerce market.