Grocery delivery startup Zepto is gearing up for a potential initial public offering (IPO) following a significant rise in its valuation to $3.6 billion. The company secured $665 million in its latest funding round, marking one of the largest investments in the sector this year. This round was led by a consortium of US and local investors, including Avenir and Lightspeed, alongside Avra, a fund initiated by Anu Hariharan, former head of Y Combinator Continuity.
Zepto reported substantial growth, projecting to manage over $1 billion worth of goods annually based on its May performance. Notably, about 75% of its warehouses were profitable in May, a significant improvement from previous timelines. The company has reduced the profitability timeline for its stores from two years to six months, demonstrating operational efficiency.
Looking forward, Zepto plans an ambitious expansion, aiming to double its number of warehouses to over 700 by March 2025. This expansion will be funded by reinvesting revenues from mature stores.
Co-founder and CEO Aadit Palicha expressed confidence in Zepto’s readiness for public listing, stating, “I believe we will be ready to go public relatively soon.” Zepto faces competition from industry giants such as Amazon, Swiggy backed by SoftBank Group, Zomato, and Tata Group’s BigBasket. Zepto’s journey from a startup to a potential public company reflects its rapid growth trajectory and evolving market position in the competitive grocery delivery sector. Zepto’s IPO aspirations, bolstered by substantial funding and operational achievements, underscore its emergence as a key player in the global delivery market.