Quick commerce startup Zepto is reportedly in advanced negotiations to secure $100 million in fresh funding, as highlighted in a recent TechCrunch report. This marks the company's third fundraising round within a mere six months. Zepto, known for its rapid delivery of groceries and office supplies within just 10 minutes across various Indian cities, is seeking investment primarily from domestic sources, including Indian family offices and high-net-worth individuals.
Funding Oversight by Motilal Oswal
The discussions surrounding this funding round are being managed by asset management firm Motilal Oswal, which has previously invested $40 million in Zepto. The report indicates that Zepto has already received commitments for over half of the targeted investment amount, although the identities of these investors remain undisclosed due to the private nature of the discussions.
Strategic Shift to Enhance Market Presence
Originally headquartered in Singapore, Zepto has relocated its base to Mumbai, with plans for an initial public offering (IPO) by 2025. Recent reports suggest that the company may be considering another relocation, this time to Bengaluru, which is regarded as India’s tech capital. This latest funding initiative aims to strengthen Zepto’s investor base with local players ahead of its upcoming IPO.
Competing in a Growing Market
Zepto’s notable backers include Avra, Lightspeed, Nexus, StepStone Group, YC Continuity, Glade Brook, and Contrary. The company is strategically positioning itself to expand its presence in India’s competitive quick commerce market, where it faces competition from major players such as Zomato-owned BlinkIt, Swiggy’s Instamart (backed by Prosus), and Tata’s BigBasket.
India has emerged as the third-largest startup ecosystem globally, according to the Department for Promotion of Industry and Internal Trade (DPIIT), which reported an 11% increase in incubators and accelerators. A recent report by Global Data indicates that Indian startups attracted $7.5 billion in venture capital funding between January and August 2024, demonstrating high investor confidence in the country's dynamic entrepreneurial landscape. Furthermore, S&P Global Market Intelligence projects that India’s nominal gross domestic product (GDP) will surpass $7 trillion by FY2031, positioning it as the world’s third-largest economy.
Zepto achieved the status of India’s first unicorn in 2023, despite a broader slowdown in unicorns across the country. Co-founders Kaivalya Vohra and Aadit Palicha also emerged as India’s youngest billionaires, with net worths of ₹3,600 crore and ₹4,300 crore, respectively, according to the 2024 Hurun Rich List. The company’s rapid ascent has also secured it the top spot on LinkedIn’s list of Indian startups for 2024.
Anticipating a Surge in E-commerce Demand
As the festive season approaches, India's e-commerce market is expected to reach $12 billion in gross merchandise value (GMV) between October and December 2024—a notable 23% increase from $9.7 billion during the same period last year, according to a recent report by logistics unicorn Shiprocket. Zepto is strategically positioned to capitalise on this anticipated growth, as demand for quick commerce continues to rise across the country.
With inputs from agencies
Image Source: Multiple agencies
© Copyright 2024. All Rights Reserved Powered by Vygr Media.
