Zepto has secured $340 million in funding, boosting its valuation to $5 billion.

Quick commerce company Zepto has raised $340 million in its latest funding round, led by General Catalyst, with new investors Dragon Fund and Epiq Capital also joining. Existing investors like StepStone, Lightspeed, DST, and Contrary have also increased their investments.

This new funding has boosted Zepto’s valuation by almost 40%, increasing it from $3.6 billion in June to $5 billion. In 2024 alone, the company has raised over $1 billion, with a total of $1.2 billion in the past year and more than $1.5 billion since it started.

Zepto plans to expand rapidly, aiming to double its number of dark stores (warehouses) to 700 by March 2025. The company is also looking to enter new cities such as Nasik, Chandigarh, Vizag, and Ahmedabad, and strengthen its presence in existing metro areas.

Aadit Palicha, Zepto’s co-founder and CEO, explained that this round of funding was crucial for two reasons. First, it allowed them to bring on Neeraj Arora from General Catalyst as a lead investor, which was a valuable opportunity. Second, it helps strengthen the company's financial position as they continue to grow and improve their operations.

Zepto delivers over 10,000 products within 10 minutes through a network of delivery hubs across the country. The Mumbai-based company is close to becoming profitable at the EBITDA level, with impressive growth of 140% year-on-year and an annual gross merchandise value exceeding $1 billion (Rs 8,300 crore). By May 2024, about 75% of its stores are reported to be fully EBITDA positive.

In FY23, Zepto saw its revenue jump fourteenfold to Rs 2,024 crore, though its losses grew to Rs 1,272 crore. The quick commerce sector is getting more competitive, with Flipkart and BigBasket making moves into rapid delivery, and Amazon expected to enter the market soon. Currently, Zomato’s Blinkit leads the sector, followed by Swiggy Instamart, Zepto, and BigBasket.