Zepto, a Mumbai-based online grocery brand, has raised Rs $100 million led by its existing growth-stage investor YC Continuity Fund, the company said on Tuesday. The startup founded by two teenage Stanford University dropouts has a valuation of $570 million followed by its Series C round that raised the amount recently. New and existing investors including Glade Brook, Nexus Venture Partners, Breyer Capital, Lachy Groom, Global Founders Capital, Contrary Capital also participated in this round. With this, Zepto, which promises to deliver groceries in a matter of minutes, has more than doubled its funding in two months. It had earlier raised $60 million at a valuation of $225 million, as per reports.
According to a report by moneycontrol.com, senior executives of global quick commerce firms — Nilam Ganenthiran, president of Instacart, and Ravi Inukonda, vice president of Doordash have also invested in the company.
With this injection of capital, Zepto plans to expand coverage across multiple cities in India and scale its team rapidly and is currently hiring across all functions, including operations, supply chain, marketing, finance, product, engineering, and human resources, the company said.
The company was launched by 19-year-old Aadit Palicha and Kaivalya Vohra in April this year and has come a long way since that. On Tuesday, the company revealed that this is the largest funding YC Continuity has ever made in an Indian startup. The investing giant, as its name suggests, primarily invests in Y combinator alumni firms and has previously invested in Doordash, Instacart and Stripe among others.
Zepto said it has been growing quickly and is tripling its user base every month. Over the past two months, Zepto has expanded beyond Mumbai by launching operations in Bengaluru, Delhi, Gurugram, Chennai, Hyderabad and Pune – with Kolkata soon to follow. “…we’re growing at a phenomenal rate, customers are loving the product experience, our core unit economics are strong, and we have one of the best startup teams in India today. Suffice it to say, I’m excited about what’s to come,” Zepto co-founder and CEO Aadit Palicha said, as per a PTI report.
“We have got a 400 person team. We’re planning to scale that up substantially. We will probably hire about 800 people in the next couple of months,” he told moneycontrol.com. The company will hire across functions, including operations, supply chain, marketing, finance, product, engineering, and human resources, said the report.
“Zepto has set up offices in all major Indian cities, with its corporate headquarters in Mumbai and Engineering/Product Office in Bengaluru. Delivering groceries in 10 minutes is a game-changing experience for customers, and it reflects in our strong product-market fit metrics. Today, our Month-on-Month Buyer retention is 65 per cent with an 88-point Net Promoter Score (NPS). This data has given us the confidence to expand the 10-minute model across the country,” Zepto co-founder and CTO Kaivalya Vohra said.
Vohra added that in five months, the company has launched 100 micro-warehouses – each of which has the capacity to handle over 2,500 orders a day – and Zepto is planning to launch at an even faster rate going forward.
As per industry sources quoted by Economic Times, Zepto will receive 100,000 orders per day by January. Palicha further said that the startup wants to achieve the target of $1 billion in annualised sales over the next four to six quarters. He added that the discount reduction by the company has not affected its transaction numbers.
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