Mumbai-based quick commerce unicorn Zepto continues to make waves in the industry by raising an additional $31.25 million in a Series E funding round. The round drew support from notable investors including Goodwater Capital, Nexus Venture Partners, and angel investors Oliver and Lish Jung, along with Mangum II LLC, according to Zepto’s filings with Singapore’s Accounting and Corporate Regulatory Authority (ACRA).
This funding follows the startup’s impressive $200 million Series E round in August, which valued Zepto at $1.4 billion, solidifying its status as the first and only unicorn of 2023. While the company has not disclosed specific plans for the new funds, it has expressed its intent to go public by 2025.
Zepto, co-founded in 2021 by Aadit Palicha and Kaivalya Vohora, seized an opportunity driven by the surge in demand for rapid e-commerce delivery during the Covid-19 pandemic. The startup gained recognition when it secured $60 million in funding in November 2021, with investors including Glade Brook Capital, Nexus, and Y Combinator.
In a competitive landscape that includes rivals like Swiggy’s Instamart, Zomato-owned Blinkit, and Reliance-backed Dunzo, Zepto is striving to maintain its edge. Industry experts suggest that the company may need to raise funds approximately every 12-15 months to accelerate revenue growth and stay competitive against strong contenders like Zomato’s Blinkit and Swiggy’s Instamart.
Despite achieving unicorn status and remarkable revenue growth, Zepto reported a 3.35X increase in net losses for the financial year 2022-23, with a net loss of INR 1,272.4 crore. This was a significant rise from INR 390.3 crore in the previous financial year.
On the revenue front, Zepto’s operations recorded impressive growth, increasing 14.3X to INR 2,024.3 crore in FY23, compared to INR 140.7 crore in FY22. The company’s total income, including other sources of revenue, surged to INR 2,077.6 crore from INR 142.3 crore in the last fiscal year.
Zepto’s financial performance underscores the challenges it faces as it seeks profitability. Despite soaring revenue, the company’s expanding losses indicate that profit margins will not improve unless a substantial portion of its dark stores becomes profitable or it explores diversification into other business verticals.
As Zepto navigates its path to growth and profitability, it remains a significant player in the quick commerce sector, and its progress will be closely watched by both investors and competitors.