Quick commerce start-up Zepto has struck a deal to raise $340 million in a new funding round. This would take the company’s valuation to $5 billion.
The funding entirely consists of primary capital and will all be in equity
Quick commerce start-up Zepto has struck a deal to raise $340 million in a new funding round. This would take the company’s valuation to $5 billion.
Out of the $340 million that Zepto received, $250 million was funded by General Catalyst, $50 million was funded by Mars Growth and the rest came from existing investors.
As per Money control, Zepto wanted to raise $400 million in funding but decided to keep their funding round at $340 million. The funding entirely consists of primary capital and will all be in equity. Money is pumped in as primary capital into a company in exchange for shares.
"We are where Amazon was in the late 90s, early 2000s. We are sitting on the right macro and the right business model to create something that is very large. And if we execute well, we are sitting on a $50-80 billion outcome," Palicha said as reported by Money control.
The funding comes at a time when Quick commerce apps that deliver a wide range of products from vegetables to electronics have seen a huge demand in the country from the investors.
The total funding, including the fresh funds that Zepto has reportedly received, has exceeded $1.6 billion of which $1 billion has come in the past 50-60 days.
This has seen Zepto’s valuation sky rocket from $1.6 billion in August 2023 to $5 billion in August 2024.
According to a report by Datum Intelligence, India’s quick commerce market is expected to grow about 35% to nearly $7 billion in gross merchandise value. Its valuation now stands at $5 billion.
Zepto was founded by Aadit Palicha and Kaivalya Vohra. The company is performing well in an environment where it faces heavy competition from rivals such as Blinkit, Swiggy-Instamart and others.
Both General Catalyst and Mars Growth will be looking to take their chances to hit the jackpot in the Indian start-up ecosystem, which is the third largest in the world. Mars Growth has already invested in companies like Zetwerk and Meesho in India.
For General Catalyst, which has recently merged with Venture Highway, will be hoping to make deep inroads in the Indian markets with its investments.