Zepto has secured $350 million in new funding, its third round of financing in six months, as the Indian quick-commerce startup strengthens its position against rivals ahead of a planned IPO next year.
Indian family offices, wealthy individuals, and asset manager Motilal Oswal invested in the round, which maintains Zepto’s $5 billion valuation. Motilal co-founder Ramdev Agarwal, family offices of Menkind Pharma, RP-Sanjiv Goenka, Celo, Haldirams, Sekshariya, and Kalyan, along with celebrities Amitabh Bachchan and Sachin Tendulkar are among the backers in the new investment. Which is the biggest total investment. Domestic primary round in India.
The funding push comes as Zepto moves rapidly to add Indian investors to its cap table, which is currently over two-thirds foreign-owned. TechCrunch first reported the discussions for the new round last month. The Mumbai-headquartered startup has raised over $1.35 billion since June.
Sales of instant commerce — delivering groceries and other items to consumers’ doorsteps in 10 minutes — are set to cross $6 billion this year in India. Morgan Stanley predicts the market will be worth $42 billion by 2030, accounting for 18.4% of total e-commerce and 2.5% of retail sales. These strong growth prospects have forced established players including Flipkart, Myntra, and Nykaa to cut delivery times as they lose business from specialized delivery apps.
While instant commerce has not yet penetrated most pockets of the world, the model seems to be working particularly well in India. is doing, where unorganized retail stores are always present.
Quick commerce platforms are creating “parallel commerce for convenience-seeking consumers” in India, Morgan Stanley wrote in a note this month.
Zepto and its rivals – Zomato-owned Blinkit, Swiggy-owned Instamart, and Tata-owned BigBasket – currently operate on lower margins than traditional retail, and Morgan Stanley expects the market leaders to grow by 7% to 8%. % will reach the contribution margin and adjusted EBITDA margin. (More than 5 percent a month by 2030, according to several people familiar with the data.)
Zepto, which delivers a total of more than 7 million orders daily in more than 17 cities, is on track to record $2 billion in annual sales, according to an investor presentation reviewed by TechCrunch. CEO Adit Palecha told investors in August that it plans to grow 150% over the next 12 months. The startup plans to go public in India next year.
However, the rapid growth of instant trade has had a devastating effect on the mom-and-pop shops that dot thousands of Indian cities, towns and villages.
According to the All India Consumer Products Distributors Federation, about 200,000 neighborhood stores have closed in the past year, with 90,000 stores closing in big cities where quick trade is high.
The federation warns that without regulatory intervention, more neighborhood stores will close as quick commerce platforms prioritize growth over sustainable practices.
Zepto said it has created work opportunities for millions of gig workers. “From day one, our vision has been to play a small role in nation-building, create millions of jobs, and offer better services to Indian consumers,” Palicha said in a statement.
Regulatory challenges are mounting. Unless an e-commerce firm is majority-owned by an Indian company or person, existing laws prevent it from operating on an inventory model. Quick commerce firms are currently not complying with these laws.
Credit : techcrunch.com
