Zepto more than doubled its valuation to $3.6 billion From $1.4 billion in less than a year In a new $665 million funding round, the Mumbai-based startup is ramping up the fast-paced business competition in the world’s second-largest internet market.

Zepto sells and delivers everything from groceries to electronic gadgets within 10 minutes to consumers in urban Indian cities. Express delivery model is thriving in India Even as most startups in the space have done Scattered in developed markets.

Glade Brook, Nexus and StepStone Group co-led the “highly oversubscribed” Series F round, Zepto said. Avenir, Lightspeed and Avra ​​(former CEO of YC Continuity Anu Hariharan New Box) Beside Current supporters Goodwater, Lachy Groom and Contary also invested in the round, the startup said.

DST Global, an early backer of Zepto’s competitor Swiggy, also co-led the new funding round, according to two people familiar with the matter. Zepto did not disclose DST Global’s participation in the new funding round and declined to comment.

Zepto competes with BlinkIt (owned by Zomato) and Swiggy’s Instamart to transform consumers’ shopping habits by offering convenient services.

These express trading companies established numerous clandestine warehouses, known as “dark stores”, throughout urban India. By strategically locating these facilities within a few kilometers of high-demand residential and commercial areas, they can fulfill orders within minutes of purchase.

“Because less space is needed to stand a dark store compared to regular storefronts, Zepto can create a wider network of stores across the city allowing for short delivery times,” says Will Robbins, partner at Contrary. books In his thesis.

Zepto aims to expand its network of dark stores to over 700 by March 2025. The startup has recorded impressive growth, with a 140% year-on-year increase, and its annual gross merchandise value (GMV) sales are on track to exceed $1 billion. It works with more than 50,000 delivery partners, and adds more than 5,000 delivery partners every month.

75% of its dark stores were fully EBITDA positive as of last month. Improved efficiency and scale mean a dark store that previously took 23 months to achieve profitability now reaches that milestone in six months, Zepto said.

The growth of rapid trading companies in India, which has a $4 trillion economy, has surprised many investors and analysts, especially since many similar platforms have collapsed in other markets.

“In India, there is a culture of hyper-local buying. This doesn’t really exist in other parts of the world. Customers in India are buying inexpensive items several times a week locally,” Aadit Palicha, co-founder and CEO of Zepto, told TechCrunch in an interview. “Very, very fast commerce gives them a very local, high proximity, low ticket use case.” “No other form of grocery, even in the offline world, has been able to deliver similar offerings to consumers.”

Fast-paced commerce startups in India are increasingly expanding beyond the grocery category. One company promises to deliver expensive items such as smartphones and gaming consoles to its customers in 10 minutes.

Palicha, who co-founded Zepto with Kaivalya Vohra when they were just 19 years old, said Zepto offers electronic accessories like chargers and cables, but the company is not looking to offer high-end electronics on its platform.

“We’re not really getting into smartphones, expensive fashion and laptops. We’re more interested in categories that represent relatively low-share purchases like home appliances, lingerie, general merchandise, toys, cosmetics, and home and kitchen products. We’re seeing a resonance there,” Palesha said. “.

The startup, which currently operates in major Indian cities, plans to expand to select smaller cities in the coming months. Palicha said Zepto was encouraged by the initial reception from cities including Jaipur where local offline offerings could not fully meet customer requirements.

“If we can achieve this while continuing to delight customers, I believe we will be ready to go public relatively soon,” he said in a statement.

Avenir, a New York-based venture firm, had been tracking Zepto for about three years before finally investing in the current round. Zepto is able to break the traditional trade-offs of retail in India, said Ben Gobas, partner at Avenir, in an interview with TechCrunch.

“It has the opportunity to become a huge business because of the depth of its value proposition and operational rigor,” he said. “In our eyes, this is second to none.”

Some industry analysts expect express trading companies to do so It significantly erodes the market share of major e-commerce players Like Amazon and Flipkart. Gobas said he supports that thesis, but it’s up to Zepto management how it intends to handle that.

According to Goldman Sachs, the total addressable market in grocery and non-grocery products for grab-and-go companies in the 40 to 50 largest cities is about $150 billion.

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