Zepto Finalizes $340M Round, Boosting Valuation to $5B as It Races to Lead India's Quick-Commerce Market

Indian instant delivery startup Zepto has secured $340 million in a new funding round, raising its valuation to $5 billion. This marks a significant increase from its valuation of $3.6 billion in June and $1.4 billion last August, as the company competes aggressively in India’s rapidly growing quick-commerce market.

General Catalyst and Mars Growth Capital are leading this Series G funding round, expected to be finalized soon, according to sources cited by TechCrunch. The pre-money valuation of Zepto stands at $4.6 billion, which translates to approximately $5 billion post-investment, as per a term sheet reviewed by TechCrunch.

This year alone, Zepto has secured nearly $1 billion in new funding.

The startup has been rapidly expanding, vying with competitors like BlinkIt (owned by Zomato) and Swiggy’s Instamart in India’s evolving quick-commerce sector, which is gradually encroaching on the market share of traditional e-commerce giants such as Amazon.

Zepto is projected to surpass $1.5 billion in annualized sales, according to an insider, while BlinkIt is expected to generate about $2 billion in annualized sales this year, as reported in Zomato’s quarterly earnings.

India’s retail market is valued at $1.1 trillion, yet much of it remains fragmented and dominated by small, family-run businesses. Reliance Retail, the country’s largest retail chain, holds a valuation of approximately $100 billion. This context explains why investors are quick to back any new retail model gaining traction in India, as noted by an industry investor who spoke anonymously with TechCrunch.

According to research firm Datum, quick-commerce is set to account for 50% of online grocery sales by 2025.

The involvement of Mars Growth in Zepto’s latest funding round was initially reported by the Economic Times, while The Information had earlier mentioned General Catalyst’s discussions with Zepto.

Quick-commerce services like Zepto have gained widespread popularity in urban India by leveraging numerous small warehouses, or “dark stores,” strategically placed close to high-demand areas. This allows them to fulfill orders within minutes.

The swift rise of quick-commerce in India, a $4 trillion economy, has taken global investors and analysts by surprise, especially given the failure of similar models in more developed markets like the U.S. and Europe. For instance, Getir recently ceased its quick-commerce operations in the U.S., the UK, and Europe.

This rapid growth has caught some established e-commerce players off guard, with analysts suggesting that companies like Amazon have been slow to adapt to the changing consumer landscape in India.

Quick-commerce firms are expected to generate between $4.5 billion and $5 billion in revenue in India this year, compared to Amazon India’s estimated $18 billion, according to JM Financial. Amazon has been in the Indian market for about a decade and has invested over $7 billion in its e-commerce operations in the country.

Analysts believe Amazon’s strategy in India has been lacking. Bernstein analyst Rahul Malhotra remarked earlier this month that founders like Deepinder (Zomato), Aadit (Zepto), Vidit (Meesho), and the Flipkart team have outperformed Amazon’s management in execution. Flipkart has recently introduced its quick-commerce service in parts of Bangalore.

Zepto aims to expand its network of dark stores to over 700 by March 2025. In June, the startup announced that its revenue had grown by 140% compared to the previous year. At that time, it also reported working with more than 50,000 delivery partners, with an additional 5,000 being added each month.

Zepto stated that 75% of its dark stores were EBITDA-positive as of May. Enhanced efficiency and scale have reduced the time it takes for a dark store to reach profitability from 23 months to just six.

Currently operating in major Indian cities, Zepto plans to expand into smaller cities in the coming months.

Goldman Sachs estimates that the total addressable market for quick-commerce in the top 40-50 Indian cities, across both grocery and non-grocery categories, is around $150 billion.