In another example of venture capitalist (VC) interest in quick delivery service models, the grocery delivery startup Zepto received USD 200 million in a fresh round of funding, taking its total brand value up, to USD 900 million. Zepto is the brainchild of two 19-year-old Stanford dropouts, and its latest funding round was led by an existing investor Y Combinator, a prominent Silicon Valley fund, along with others like Nexus Venture Partners, Glade Brook Capital and Lachy Groom (Head of Stripe Issuing). The funding round also saw participation from Kaiser Permanente, a US based healthcare giant.
We posted 800% quarter on quarter revenue growth, while burn has come down 5X on a per order basis. This unbelievable execution over the past few months has made it clear to the investors that Zepto will be one of the winners in Indian quick commerce.”Aadit Palicha, Co-Founder and CEO, Zepto
Early last month, Zepto also piloted the ‘Zepto Cafe’ in Mumbai offering ready-to-drink coffee, chai, and packaged snacks (like biscuits and sandwiches) in a Cafe setup. However, they’re waiting to analyze the numbers from the pilot before making any scaling decision. According to Zepto’s official statement, “We don’t want to get distracted from our core business by building a complex supply chain for food delivery, where it’s difficult to control quality.”
Zepto is currently delivering groceries from over 3000 products in less than 10 minutes in many Indian cities, operating on a hub and spoke model via a dense network of ‘dark stores’ and retail distribution centers. In competition, it has Swiggy’s Instamart, Soft-bank backed Blinkit, and Reliance backed Dunzo, among others like MilkBasket, BigBasket.