Zepto secures additional $31 million in extended funding round

Zepto was valued at $1.4 billion in August and became the only unicorn to be minted from India in 2023

Zepto, the quick-commerce unicorn, has raised another $31 million in an extended funding round, regulatory filings showed. The fresh funding is on top of the $200-million round that the Mumbai-based company secured in August.

The additional capital came from existing investors like Goodwater Capital and Nexus Venture Partners. Mangum II LLC along with angel investors like Oliver and Lish Jung also participated in the latest round, filings showed. Zepto's valuation is unchanged at $1.4 billion after the fresh round.

With the latest fundraise, Zepto has now raised close to $600 million, including the $200 million round in August which valued Zepto at $1.4 billion. 

Of the $200 million that Zepto had raised in August, $105 million came from the StepStone Group ($75 million) and Goodwater Capital ($30 million), both first-time investors in the Mumbai-based company. While this marks StepStone’s first direct investment in the country, Goodwater Capital has invested in audio-streaming startup Pocket FM and edtech companies Teachmint and Yellowclass.

Zepto got the remaining $95 million from existing investors Nexus Venture Partners, Glade Brook Capital and Lachy Groom. Barring Nexus, Zepto hasn’t actively raised money from India-centric VCs, but that may change over the years.

Zepto competes with Zomato-owned Blinkit, Swiggy Instamart, Reliance-funded Dunzo and Tata’s BigBasket (BB Now). While Blinkit and Instamart keep swapping places as the top two players, Zepto was the third-largest in terms of order volumes, it told investors in a pitch deck that Moneycontrol accessed earlier.

Zepto's back-to-back funding rounds come at a time when auditors have said Dunzo, a competitor, may not even be a going concern in the future. Dunzo is, however, confident it will continue to function and is ling up capital.

In FY23, the quick-commerce unicorn, saw its revenue from operations jump from Rs 141 crore in FY22 to Rs 2,024 crore in FY23, helped by an increased store count and new customers trying out the company’s services during the year.

In the whole of FY23, Zepto opened about 100 new stores, mostly in existing locations, as it saw more customers coming on to its platform. Opening new stores, however, proved to be expensive for the company.

The company’s total expenses increased multifold from Rs 533 crore in FY22 to Rs 3,350 crore during the fiscal year gone by, regulatory filings showed. The mounting expenses also resulted in Zepto’s losses widening 3X from Rs 390 crore in FY22 to Rs 1,272 crore in FY23.