Zepto raises $200 million, becomes first unicorn of 2023

Online grocery delivery startup Zepto has raised $200 million in Series-E fundraise, valuing the company at $1.4 billion, and making it the first unicorn of 2023.

The fundraise was led by US-based private markets investment firm StepStone Group, Zepto, set up in the aftermath of the pandemic, on Friday said.

The investment also marks StepStone Group’s first direct investment in an Indian company.

Additionally, Goodwater Capital, a consumer-focused venture capital firm based in California, joined the round as a new investor. 

Notably, existing investors, like Nexus Venture Partners, Glade Brook Capital, Lachy Groom and more, doubled down in Zepto with meaningful follow-on investments.

In 2022, Zepto had raised $200 million in a Series D funding round led by American technology startup accelerator Y Combinator’s Continuity Fund, which then valued the quick commerce firm at $900 million.

Zepto, founded in 2021 by Stanford University dropouts, Aadit Palicha and Kaivalya Vohra, is also eyeing a public market listing in the next two-to-three years.

In May this year, Zepto elevated several key executives in the run-up to its plans to list.

Zepto essentially delivers over 6,000 grocery products in 10 minutes through a network of delivery hubs across the country.

The model has come to be known as quick commerce but has been questioned for its high cash burn and the lack of a sustainable business model.

The company has grown its sales by 300% year-on-year and will likely achieve $1 billion in annualized sales within the next few quarters, it said.