Zepto Targets $500 Million in New Funding Round

Zepto, a quick commerce company, is reportedly in advanced negotiations to secure $500 million in a new funding round led by existing investors such as General Catalyst and Avenir, as stated in a Moneycontrol report. This funding round is anticipated to elevate the valuation of the Mumbai-based startup to approximately $7 billion, marking a substantial increase from its last valuation of $5 billion achieved when it raised $350 million in November 2024. In total, the firm, led by Aadit Palicha, has successfully raised $1.35 billion in 2024.

This news follows the company’s decision to delay its planned initial public offering (IPO) until 2026. Earlier this year, Zepto had completed its reverse flip back to India.

Focus on Profitability and Cost Management

Zepto is currently focusing on reducing cash burn and enhancing profitability in preparation for its public listing. In light of escalating operational costs, the company has temporarily closed its food service division, Zepto Cafe, in several smaller North Indian cities, including Agra, Chandigarh, Meerut, Mohali, and Amritsar.

Industry Competition

The quick commerce sector is intensely competitive, with rivals like Blinkit and Swiggy posing significant challenges. An ICICI Securities report indicates that Blinkit and Swiggy Instamart experienced notable growth in Q1 FY26, with gross order values increasing by over 25% and 22%, respectively. This performance dwarfs the sub-20% growth seen across the broader quick-commerce sector.

Growth Metrics

In April, Palicha indicated that Zepto is approaching an annualised Gross Order Value (GOV) of $4 billion. He noted that the firm scaled from $1 billion to $3 billion in GOV within an eight-month span, reflecting a staggering 300% year-on-year growth and a 30% increase since January 2025.

Positive Financial Outlook

Recently, Palicha mentioned that a majority of Zepto’s dark stores are expected to attain full EBITDA positivity in the upcoming quarter. Earlier in the year, the company closed a $665 million Series F round, followed by a $340 million top-up, raising over $1 billion in 2024 alone.

Zepto asserts that most of its dark stores have achieved EBITDA positivity, with plans for deeper expansion into metropolitan areas and Tier II/III cities. The forthcoming funding is expected to bolster operational scalability, strengthen its technology stack, and improve supply chain efficiencies.

While previous reports suggested a delayed timeline for the IPO, Zepto has clarified that it aims for a late 2025 to early 2026 launch, depending on market conditions. The company is also working to adjust its cap table to incorporate more domestic investors in anticipation of a potential listing in India.

Since its founding in 2021, Zepto has positioned itself against competitors such as Blinkit, Swiggy Instamart, and BigBasket within India’s rapidly evolving quick commerce landscape.