Zepto, an instant grocery delivery startup, is on the verge of securing approximately $650 million from both existing and new investors. This investment is set to catapult its valuation to a whopping $3.5 billion.

What Happened: This funding round will more than double Zepto’s valuation from its previous $1.4 billion, demonstrating investors’ confidence in the company’s growth prospects in the quick commerce arena, Moneycontrol reported. The list of existing investors includes StepStone Group, Nexus Venture Partners, and Glade Brook Capital, while new investors include Avenir Growth, Lightspeed Venture Partners, DST Global, and Avra.

An insider revealed to Moneycontrol that “Nexus and its LP (limited partner) StepStone will together lead the round by putting in a majority of the total $650 million.” This investment marks one of the largest ever for Nexus, underlining Zepto’s consistent growth in valuation during each fundraising round.

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Zepto’s second major fundraising within a year, this round comes after the Y Combinator-backed startup raised $231 million in August 2023. The fresh capital injection will bolster Zepto’s competitive stance against larger players such as Zomato-owned Blinkit, Swiggy Instamart, and Tata's BigBasket.

Why It Matters: Quick commerce has evolved into a $5-billion annual sales channel in India, as per Goldman Sachs. Zepto, one of the top three players, processes 5.5 lakh orders daily across seven cities in India, with an annualised gross order value (GOV) of $1.2 billion.

Earlier this year, Zepto reportedly rejected an acquisition offer from Flipkart, choosing instead to pursue a financial round to secure new funding.

The quick commerce sector has seen escalating competition, with Zomato recently announcing plans to invest ₹300 crore into its quick commerce division, Blinkit, to fortify its position against rivals like Swiggy and Zepto.

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