Zepto, a quick-commerce business, ended India’s 11-month unicorn drought by raising $200 million at a valuation of $1.4 billion. The StepStone Group, a US asset management company, led the Series E investment, which also included Goodwater Capital and a few previous investors. The value of Zepto increased from $900 million in May 2022. Zepto is the first unicorn, or firm valued at over $1 billion, to be minted in India this year, thus the money is very significant. The final unicorn, Molbio Diagnostics, was recognised in September 2022.
Almost every week during the peak of the fundraising boom in 2021, the country added a unicorn. In 2021, 44 firms will have joined the unicorn club, up from 23 last year. Since then, investors have tightened their purse strings and have been picking and choosing which businesses to finance, reflecting their cautious approach.
The StepStone Group ($75 million) and Goodwater Capital ($30 million), both new investors in the Mumbai-based startup, contributed $105 million of the $200 million raised by Zepto.
While this is StepStone’s first direct investment in the country, Goodwater Capital has previously invested in audio-streaming startup Pocket FM as well as edtech firms Teachmint and Yellowclass.
Nexus Venture Partners, Glade Brook Capital, and Lachy Groom contributed the remaining $95 million to Zepto. Except for Nexus, Zepto hasn’t actively raised money from India-focused VCs, but that could change in the future, according to co-founder Aadit Palicha.
The delivery app competes with Blinkit, Swiggy Instamart, Reliance-backed Dunzo, and Tata’s BigBasket (BB Now). While Blinkit and Instamart continue to trade positions as the top two players, Zepto was the third-largest in terms of order volumes.
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