
Indian online grocery startup Zepto has seen its valuation jump by around 40%, reaching $5 billion following a recent funding round led by General Catalyst Partners. This increase underscores the continued interest of foreign investors in India's rapidly growing e-commerce sector.The $340 million funding round also included new investors Dragon Fund and Epiq Capital, while existing backers like Lightspeed Venture Partners and DST Global increased their stakes, according to a statement released by Zepto on Thursday.In June, Zepto, based in Mumbai, had previously raised $665 million, with new investors like Avenir and Lightspeed participating, which valued the company at $3.6 billion at that time.Despite concerns about regulatory issues at Paytm and insolvency at edtech firm Byju's, which have made some investors wary, investment continues to flow into India's e-commerce industry. For example, in May, Google, a subsidiary of Alphabet Inc., invested $350 million in Walmart Inc.'s Flipkart, reflecting confidence in India's expanding middle class.Zepto is growing its user base as more Indian consumers embrace online shopping. The company has announced plans to double its warehouse count to over 700 by March 2025, reinvesting revenue from its established dark stores. Additionally, Zepto is reportedly preparing for an IPO in the near future.The company was founded in 2021 by Aadit Palicha and Kaivalya Vohra, who left Stanford University's computer science program to return to India and launch the startup while still teenagers.Zepto operates in India's highly competitive grocery delivery market, characterized by low margins but high volumes, and faces competition from major players such as Amazon India, Swiggy Ltd., Zomato Ltd., and Tata Group's BigBasket.
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