Zepto in final stages of $450M funding at $7B valuation
What's the story
Zepto, a significant player in the quick commerce space, is in the final stages of raising $450 million (roughly ₹3,900 crore), as per Moneycontrol. The move comes as part of its strategy to expand offerings and scale operations amid stiff competition. The funding round is co-led by California Public Employees's Retirement System (Calpers), a US-based pension fund, and General Catalyst (GC), an existing investor in Zepto.
Investor participation
Existing investors to bolster their stakes
Along with Calpers and GC, other existing investors such as Avenir, Avra, Lightspeed, Glade Brook, The Stepstone Group and Nexus Venture Partners are also expected to participate in this funding round. The move is aimed at helping these investors maintain their stakes in the company.
Valuation increase
Zepto's valuation set to soar
The latest funding round will see Zepto's valuation jump to $7 billion, a 40% increase from last year's $5 billion. The company's growth has been fueled by an over 20% increase in order volumes, reported Moneycontrol, citing people familiar with the details. The funds raised will be mainly used for primary capital, directly benefiting Zepto's coffers.
Share deals
Secondary share deals to play a role
A small portion of the funds raised, between $70-100 million, will come from secondary share deals. In these transactions, early investors sell shares to new ones entering the company. This strategy is often used in funding rounds to allow existing investors to cash out while still keeping their stake in the company through new investments.
Market strategy
Zepto aims to boost spending, increase market share
With the new funding, Zepto plans to ramp up its spending and increase its market share. The move comes as a response to the changing dynamics of the quick commerce market, which has cooled down in recent months with players like Eternal's Blinkit and Swiggy's Instamart focusing on profitable growth. With more funds at its disposal, Zepto hopes to reclaim some lost ground in this competitive space.