Zepto Raises $665 Million, Plans Additional $250 Million with Major Investor Interest

Zepto, an instant grocery delivery app, has attracted investor interest for an additional $250 million in a new funding round, now valuing the company at approximately $4.6 billion, according to sources familiar with the matter. This round, potentially reaching $400 million, will also include General Catalyst as a new investor, the sources added.

In addition to General Catalyst, Zepto has reportedly attracted interest from private equity firms and sovereign funds, including KKR, Singapore's GIC, and the Abu Dhabi Investment Authority (ADIA). This highlights the significant investor interest in India's rapidly expanding quick commerce sector.

Zepto, competing with Zomato’s Blinkit, Swiggy Instamart, and Tata’s BigBasket, among others, is experiencing a surge in interest due to its strong execution and rapid growth over the past three years. The company's gross merchandise value (GMV) has surpassed $1 billion, and it is on track to achieve profitability on an EBITDA basis in the coming months.

Investor interest in a new funding round at a higher valuation arises less than two weeks after Zepto announced it had raised $665 million from existing and new investors, valuing the company at $3.4 billion. This valuation more than doubled from $1.4 billion in August 2023.

If the discussions are successful, Zepto's valuation would have increased 3.3 times in nearly 11 months, despite a broader funding winter that has seen a slowdown in late-stage deals over the past couple of years.

Zepto co-founder and CEO Aadit Palicha previously informed Moneycontrol that the company’s gross merchandise value (GMV) has surpassed $1 billion in under 2.5 years. He also noted that the company's bottom line has significantly improved in recent months, enabling it to raise funds with ease.

“It was known that more money was coming into Zepto even before its previous round had closed. If things go as planned, General Catalyst, along with other investors, will join the company’s cap table as part of the new round,” one of the persons cited above told Moneycontrol.

Once the round is completed, Zepto will be the only company this year to have raised over $1 billion in such a short time frame, surpassing even Flipkart, which closed a substantial $950 million round in May. Large fundraises like this have become rare since mid-2022, as investors have become more selective about the companies they support. The last time such a funding frenzy was observed was during 2020 and 2021, when India saw a record number of unicorns emerge, driven by investor enthusiasm for pandemic-favored sectors like edtech.

For General Catalyst, this will be the first significant investment since the US-based venture capital firm announced its merger with homegrown fund Venture Highway to bolster its presence in India. According to a report by Moneycontrol last month, General Catalyst plans to invest between $500 million and $1 billion in India over the coming years. The firm already supports several Indian companies, including Cred, Uni, Spinny, Orange Health, FarMart, and Loop Health, among others.

Discussions about General Catalyst investing in Zepto coincide with the venture fund finalizing a new $6 billion fund for tech startups, as reported by The Financial Times in April.