Yuri Milner’s DST Global and Lightspeed Venture Partners are expected to participate in the ongoing financing round for Zepto, according to multiple informed sources.
This, along with other new entrants, may reshape the fundraising landscape for the quick commerce unicorn, which was on track to raise $300-350 million and achieve a valuation of $2.5-3 billion.
Continue Exploring: Zepto in talks for $300 Million funding, eyes valuation jump to $3 Billion
A group of private equity funds and Zepto’s existing investors, including Nexus Venture Partners, are also participating in what has become one of the most sought-after deals in the consumer internet sector this year, despite ongoing challenges in late-stage fundraising.
“The round began in April and has since drew significant interest from a number of top-tier investors, according to a person familiar with the situation. “The financing is nearly complete, and an official announcement could come at any time.”
Another individual familiar with the situation stated, “There has been heightened activity in the round over the past week, with the potential for additional external investors to participate… If that happens, it will be closed in stages.”
Queries directed towards Zepto, DST Global, and Lightspeed went unanswered.
This current fundraising effort will mark one of Zepto’s fastest scale-ups.
Despite the high cash burn typically associated with consumer-centric businesses like ultra-fast-delivery platforms, investors are enticed by their growing popularity.
Zepto’s Rapid Growth Trajectory
According to financial analysts monitoring Zepto, the Mumbai-based startup, originally launched as the grocery delivery app KiranaKart during the pandemic, has surpassed $1.4 billion in annualized gross sales run rate as of May. A run rate is an estimate projected from the current financial performance.
Continue Exploring: Zepto gains ground in quick-commerce market as Instamart slips
Zepto is positioning the fundraising as a pre-initial public offering (IPO) round, while simultaneously preparing to transition back from Singapore. “The company aims to commence preparations for its public debut within a year,” stated a source familiar with the matter.
DST Global’s interest goes against the current trend, as the investment fund, led by Russian-Israeli tech billionaire Milner, has been decreasing its presence in India. Its portfolio now mainly consists of the B2B commerce startup Udaan, ecommerce giant Meesho, and the used car trading platform Cars24.
Once regarded as one of the most dynamic late-stage investors in the domestic consumer internet sector, DST had supported early industry giants like Flipkart and Ola. However, globally, DST has been adopting a more cautious approach since 2021.
According to insiders, Lightspeed’s investment in Zepto will be made through its growth-stage investment vehicle. In recent months, Lightspeed has finalized significant deals, such as with Razorpay, using its global fund. Additionally, it has been assessing other late-stage investment opportunities.
Competition Intensifies in India’s Quick Commerce Sector
The quick commerce sector stands out as one of the most fiercely competitive segments in India’s consumer internet industry, boasting several well-funded players including Zomato-owned Blinkit, Instamart by Swiggy, and BB Now by Tata Digital’s BigBasket.
Continue Exploring: Reliance Industries set to disrupt quick commerce market with JioMart’s entry, challenging Blinkit, Zepto, and others
On Tuesday, Zomato announced an investment of INR 300 crore into Blinkit, which aims to expand its network to 1,000 ‘dark stores,’ up from the 526 it had as of March 31. To provide context, Zepto currently operates 350 such warehouses, while Instamart has over 500.
Continue Exploring: Zomato to bolster Blinkit with INR 300 Cr as quick commerce landscape heats up
Walmart-owned Flipkart, which recently concluded a nearly $1-billion funding round, is set to launch its quick delivery service next month. Amazon is also closely monitoring this rapidly growing segment, indicating that major marketplaces view quick commerce as a significant contender.
JM Financial recently projected that quick commerce would reach $6 billion in gross merchandise value (GMV) by the end of 2025.
Continue Exploring: Quick commerce sector soars as Millennial and Gen Z homes drive growth