Zepto co-founders Aadit Paricha (front row) and Kaivalya Vora
Mumbai-based quick commerce company Zepto plans to double its warehouses, or dark stores, across India to 700 by March 2025 after its latest funding round valued it at $3.6 billion, about 2.6 times its valuation in its previous funding round.
Zepto was founded in 2021 by Aadit Paricha and Kaivalya Vora, who were 19 years old at the time. The two dropped out of Stanford University's computer science department and started a grocery delivery service. Since then, they have expanded to deliver everything from apparel to toys and have grown into India's largest quick commerce company by gross merchandise value, competing with Zomato's Blinkit, Swiggy's Instamart and BBnow, operated by Tata Group's BigBasket.
“This dynamic of stores becoming profitable faster and faster has enabled Zepto to grow rapidly while simultaneously moving closer to EBITDA profitability at the company level,” Zepto co-founder and CEO Paricha said in a statement. “By reinvesting capital generated from mature stores back into the business, we plan to continue to operate with fiscal discipline as we expand our store count from 350 to 700.”
Zepto said in May that it was on track to achieve more than $1 billion in GMV during the fiscal year ending March 2025, with about 75% of its warehouse stores already turning an operating profit. It now takes stores six months to turn a profit, compared with 23 months previously, the company added.
Paricha, who was named to Forbes magazine's 30 Under 30 Asia list for 2022 along with Vohra, said if momentum continues the company “will be ready to go public relatively soon.”
In its latest funding round, announced on Friday, Zepto raised $665 million from new investors including private equity firm Avenir, venture capital firm Lightspeed and Avra, a new fund launched by former Y Combinator Continuity head Anu Hariharan. Existing investors including Glade Brook Capital Partners, Nexus and StepStone Group also invested in the round, according to a statement from the Indian unicorn. The round comes just nine months after the company raised $235 million in December at a valuation of $1.4 billion.
“Zepto is redefining e-commerce in India with its uniquely strong product-market fit and world-class execution and innovation,” Paul Hudson, chief investment officer at Glade Brook, said in a statement.
—Report by Anu Raghunathan
