Mumbai-based quick-commerce business Zepto plans to seek an additional $310 million, bringing its worth to $5 billion, a 40% rise from its previous investment round just over a month ago. This fresh round of funding brings Zepto's total investment to roughly $1 billion in two consecutive waves for the three-year-old startup.

Zepto's investment round may exceed $350 million

The future investment round is likely to include significant investors such as Mars Growth Capital—co-managed by Mitsubishi UFJ Financial Group Inc and Israel's Liquidity Group - as well as US-based General Catalyst and other current investors. According to the article, Mars Growth is expected to spend roughly $50 million, with General Catalyst potentially contributing around $200 million. The transaction might be worth $350 million in total, with current investors and some high-net-worth people participating.

The investment agreement apparently includes a limitation that forbids Zepto from raising more than $350 million in a new round within 90 days of the prior one, even at a higher value. This policy is intended to safeguard current investors against dilution of their interest.

Mars Growth Capital, which has previously invested in Indian unicorns such as Zetwerk and Eruditus, will be joined by General Catalyst, an existing Cred investor. As part of the agreement, Neeraj Arora, a General Catalyst partner and former WhatsApp chief business officer, will join Zepto's board.

Zepto's IPO preparations

Zepto, which is now based in Singapore, is to relocate to India as it prepares for an initial public offering (IPO). Major investors, including DST Global, Avenir Growth Capital, Lightspeed Venture Partners, and Avra, expressed interest in the company during the June investment round.

In June 2024, Zepto raised $665 million from a consortium of investors, tripling its valuation to $3.6 billion from $1.4 billion in August 2023. Zepto's worth has increased by more than three and a half times over the last year, owing to rising demand for quick-commerce services.

The current amount of funding will give Zepto more resources to fight with larger players in the quick-commerce industry, such as Blinkit, Swiggy Instamart, and Tata Digital-owned BigBasket's BB Now. Zomato owns Blinkit, which is presently valued at $12-13 billion and expects to grow to 2,000 dark storefronts by 2026. Meanwhile, Zepto plans to open 700 dark stores by March 2025 in order to improve its annualized gross sales run rate, which is now approximately $1.5 billion.