Quick commerce grocery delivery app Zepto has raised $60 million in a funding round led by US -based investment fund Glade Brook Capital, at a post-money valuation of $225 million. Venture capital fund Nexus Venture Partners and Silicon Valley’s Y Combinator participated in the fundraising, as did prominent angel investors including WhatsApp’s former Chief Business Officer Neeraj Arora.
The Mumbai-based startup will utilize the funds to expand the number of dark stores in newer cities to expand its customer base and hire more employees. It is also present in Bengaluru and Delhi-NCR and will launch in Hyderabad, Chennai, Pune, and Kolkata in the next 30 days. It plans to expand to 100 dark stores, thereby servicing around 100 pin codes, by the end of this year. Dark stores are typically small warehouses populated in dense areas in a city through which platforms try to service orders quickly.
Founded by Aadit Palicha and Kaivalya Vohra, Zepto promises to deliver groceries in 10 minutes. Zepto is entering the quick commerce space — defined as delivery under 45 minutes — at a time when well-funded and bigger startups like Swiggy, Grofers, Dunzo, and BigBasket are doubling down on the sector as well.
“A lot of people assume that there is some magical innovation happening in the last mile. The last mile is actually very straight forward. The magic of this model is that we manage the entire process of packing and dispatching the grocery in under 60 seconds,” Palicha said.
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The company has 300 corporate employees — excluding the warehousing staff — and plans to quadruple that over the next few months. Palicha said that the service was growing 200% month on month in terms of revenue, without disclosing numbers. According to him, Zepto’s median delivery time is about eight minutes.
Express delivery as a concept is not new as most of the existing e-grocers have tried it before, without much success. Over the last few months, following the accelerated adoption of online grocery due to the Covid-19 pandemic, these platforms are bringing back quick deliveries to consumers, mostly through the dark-store model.
“Quick ecommerce is poised to transform shops around the world. Zepto has emerged as a leader in India, with exponential growth and best-in-class execution. We look forward to partnering as Zepto brings a magical consumer experience across India,” said Paul Hudson, CIO at Glade Brook Capital.
Speaking about the platform, Kaivalya Vohra, Co-founder and CTO, Zepto, said, “Customers love a rapid delivery experience. The data speaks for itself – once we started delivering in 10 minutes, our NPS shot up and has constantly remained at around 85 with over 50 percent weekly user retention rate, which shows the incredibly strong customer love for our product.”
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