Zepto to raise $310 million, valuing quick-commerce firm at $5 billion

Quick-commerce grocery delivery platform Zepto, currently based in Singapore, plans to relocate to India to prepare for its IPO filing

Mumbai-based quick-commerce firm Zepto is set to raise an additional $310 million, pushing its valuation to $5 billion — a 40 per cent increase from its last funding round just over a month ago, according to a report by The Economic Times. This new round of financing will bring Zepto’s total fundraising to nearly $1 billion in two successive rounds for the three-year-old company.

Zepto funding round may reach $350 million

The upcoming funding round is expected to involve key investors, including Mars Growth Capital—co-managed by Mitsubishi UFJ Financial Group Inc and Israel’s Liquidity Group — alongside US-based General Catalyst and other existing investors. The report indicates that Mars Growth is likely to invest approximately $50 million, while General Catalyst could contribute around $200 million. The total size of the round may reach $350 million, with participation from existing investors and some high-net-worth individuals.

 

The terms of the funding reportedly include a restriction that prevents Zepto from raising more than $350 million in a new round within 90 days of the previous one, even at a higher valuation. This measure is designed to protect existing investors from dilution of their stakes.

Mars Growth Capital, which has previously invested in Indian unicorns like Zetwerk and Eruditus, will be joined by General Catalyst, an investor in Cred. As part of the deal, Neeraj Arora, a partner at General Catalyst and former chief business officer of WhatsApp, will join Zepto’s board.

Zepto IPO preparations

Zepto, currently domiciled in Singapore, is planning to relocate to India as it prepares for an initial public offering (IPO). The firm has attracted interest from major investors, including DST Global, Avenir Growth Capital, Lightspeed Venture Partners, and Avra, all of whom participated in the June funding round.

In June 2024, Zepto secured $665 million from a group of investors, doubling its valuation to $3.6 billion from $1.4 billion in August 2023. Over the past year, Zepto has seen its valuation rise more than three and a half times, driven by the increasing demand for quick-commerce services.

The latest round of financing will provide Zepto with additional resources to compete with larger rivals in the quick-commerce space, including Blinkit, Swiggy Instamart, and Tata Digital-owned BigBasket’s BB Now. Blinkit, owned by Zomato, is currently valued at $12-13 billion, with plans to expand to 2,000 dark stores by 2026. Zepto, meanwhile, aims to set up 700 dark stores by March 2025, as it seeks to increase its annualised gross sales run rate, which currently stands at around $1.5 billion.