Indian grocery delivery startup Zepto is preparing to go public after more than doubling its valuation to $3.6 billion in a round of financing led by US and local investors.
Zepto has raised $665 million from new investors including private equity firm Avenir, venture firm Lightspeed, and Avra, a new fund started by former Y Combinator Continuity head Anu Hariharan. Existing investors including Glade Brook, Nexus, and StepStone Group co-led the round, the Mumbai-based startup said in a statement.
Zepto is on track to handle more than $1 billion of goods a year, based on May's performance. About three-quarters of its 350 so called dark stores, or warehouses, were making an operating profit in May, the company said. The stores now take six months to become profitable as compared to about two years previously, it added.
Zepto plans to double warehouses to more than 700 by March 2025 by reinvesting sales from mature stores to fund the expansion.
"I believe we will be ready to go public relatively soon," Co-founder and Chief Executive Officer Aadit Palicha said in the statement.
Childhood friends Palicha and Kaivalya Vohra dropped out of Stanford's computer science program and returned to India to build the startup in 2021 when they were teenagers.
Zepto competes in India's hyper-competitive grocery delivery space that suffers from low margins. Rivals in the market include e-commerce giant Amazon.com Inc.'s India unit and homegrown competitors such as SoftBank Group Corp.-backed Swiggy Ltd., publicly-traded Zomato Ltd., and conglomerate Tata Group's BigBasket.
