Zepto, an instant grocery delivery startup, has successfully raised $200 million in a recent funding round, elevating its valuation to an impressive $1.4 billion. This achievement marks Zepto’s distinction as the first Indian startup to attain unicorn status this year.
Backing from Prominent Investment Firms
Leading the Series E funding round is StepStone Group, a well-known limited partner in various venture funds. This venture marks StepStone Group’s inaugural direct investment in the Indian market.
The funding effort also witnessed participation from Goodwater Capital and existing backers including Nexus Venture Partners, Glade Brook Capital, and Lachy Groom.
Zepto’s Unique Approach to Quick Commerce
Zepto’s story began in 2021 when two determined 19-year-olds, Aadit Palicha and Kaivalya Vohra, founded the company. In the space of same day delivery services, Zepto sets itself apart from its competition, including SoftBank-backed Swiggy and Blinkit.
Zepto’s CEO, Aadit Palicha, emphasises that the company boasts the fastest average delivery time of just 13 minutes.
Grabbing the Opportunity Amidst Pandemic
Zepto’s success can be attributed to its strategic entry into the quick-commerce delivery space, capitalising on the growing demand in the wake of the COVID-19 pandemic.
The startup faces competition from Swiggy’s Instamart, Zomato-acquired Blinkit, and Reliance-supported Dunzo. Zepto’s validation of the quick-commerce concept has positioned it as a pioneering force in India.
Mastering Supply Chain and Execution
Zepto’s success reflects its expertise in execution and supply chain management. Aadit Palicha explained that the core of businesses driven by supply chain intensity lies in meticulous execution. Zepto’s discipline and precision in every aspect of the supply chain set it apart.
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Efficiency, Growth and Strategic Planning
Operational efficiency is key for Zepto’s success. The company operates in seven Indian cities and handles a range of products, processing over 300,000 orders daily.
Zepto’s network of strategically located dark stores contributes significantly to its success. Zepto’s financial prudence is evident in its plans to achieve company-wide EBIDTA positivity within 12 to 15 months.
Operating in a Competitive Market
Zepto’s remarkable funding comes at a time when several global instant delivery startups are facing difficulties. Industry giants like Gopuff, Jokr, Getir, and Instacart have experienced operational setbacks, valuation declines, or even complete shutdowns.
Against this, Zepto’s success is a testament to its resilient approach and well-executed strategies.
Setting the Bar High
Zepto’s achievement resonates with investors and industry observers alike. Will Robbins from Contrary, an early-backer of Zepto, says that the startup has raised the comparative bar, reflecting its exceptional performance and positioning in the market.
Amidst an economic slowdown, Zepto’s unicorn status sets a high standard for other startups in India.
Zepto’s ability to execute with precision and uphold supply chain discipline has propelled it to unicorn status. The company aims to go public by 2025 and establish itself as a thriving technology firm beloved by customers.
With a focus on technology, strategic expansion, and profitability, Zepto goes down as a pioneer in the competitive instant grocery delivery market as the first Indian unicorn of 2023. Zepto’s success serves as an inspiration for startups seeking to thrive amidst adversity.