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Quick commerce unicorn Zepto has raised $665 million at a valuation of $3.6 billion. With this, Avenir, Lightspeed, and Avra (Anu Hariharan’s new fund) have joined the company’s cap table as new investors, among others.

The round also witnessed participation from existing investors Glade Brook, Nexus, and StepStone along with Goodwater and Lachy Groom. 

Zepto said its gross merchandise value (GMV) has multiplied year-on-year to a base of more than $1 billion and that nearly three-fourth of the company’s stores are fully EBITDA positive as of May 2024. It has achieved near EBITDA positivity with 140% year-on-year growth on the base of $1 billion in annualised GMV, Zepto said in a statement.

The company plans to focus on expansion and double store count to 700 by March 2025. It had earlier said it plans to float an initial public offering in early 2025. 

“This dynamic of stores turning profitable faster and faster has enabled Zepto to grow rapidly while simultaneously achieving near EBITDA positivity at a company level,” said Aadit Palicha, Co-founder & CEO, Zepto. 

“We plan to continue operating with fiscal discipline as we scale from 350 stores to 700 stores by reinvesting the capital generated from mature stores back into the business. If we are able to achieve this while continuing to delight customers, I believe we will be ready to go public relatively soon,” he added.

Zepto is focusing on growing its consumer offerings and new projects that will offer 10X customer experience, including launching categories and expanding initiatives like the Zepto Pass membership programme, noted Co-founder & CTO, Kaivalya Vohra.

Investors remain optimistic

The company had raised $200 million in Series E funding in August last year, at a valuation of $1.4 billion. The round was led by StepStone Group. 

In November, it raised another $31.25 million from Goodwater Capital and Nexus Venture Partners as part of its Series E round. 

These investments underscored the company’s plans to increase penetration in the top seven cities of Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Pune, and parts of Kolkata.

The latest fundraise marks the launch of Avra Capital, a growth equity fund started by Anu

Hariharan, former MD of Y Combinator Continuity.

“We are thrilled to partner with Zepto once more, this time through Avra, marking our first global investment. Zepto may appear to be a mere 10-minute quick commerce company at first glance, but they are transforming Indian ecommerce by creating the ‘Hyperlocal Amazon’, combining affordable prices with local convenience,” said Hariharan.

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Investors remain optimistic about the quick commerce sector despite challenges such as significant cash burn and difficulties in last-mile delivery. Higher smartphone penetration and rising disposable income, along with a growing middle class, are fuelling investor expectations from the sector.

Zepto faces stiff competition from Zomato’s Blinkit and Swiggy’s Instamart. Blinkit achieved EBITDA profitability in March, while Swiggy witnessed a valuation markup, ahead of its $1.25-billion public debut.