Zepto, an Indian quick-commerce startup, has recently secured $350 million in funding, marking its third round of financing in just six months. This influx of capital comes as Zepto gears up for an IPO next year and aims to solidify its position in the market. The funding round saw investment from Indian family offices, wealthy individuals, and asset manager Motilal Oswal, among others, helping to maintain Zepto’s valuation at $5 billion.
The Mumbai-based startup has been on a funding spree, raising over $1.35 billion since June. This latest round of funding is the largest fully domestic primary round in India, with prominent backers including the family offices of Mankind Pharma, RP-Sanjiv Goenka, Cello, Haldiram’s, Sekhsaria, and Kalyan, as well as celebrities like Amitabh Bachchan and Sachin Tendulkar.
The quick-commerce sector in India is experiencing rapid growth, with sales projected to exceed $6 billion this year and reach $42 billion by 2030, according to Morgan Stanley. Companies like Zepto, along with competitors such as Blinkit, Instamart, and BigBasket, are capitalizing on this trend by offering fast delivery services to customers’ doorsteps in just 10 minutes.
Despite the promising growth prospects, the rise of quick-commerce has had a negative impact on traditional mom-and-pop shops across India. Around 200,000 neighborhood stores have closed in the past year, with 90,000 of those closures occurring in major cities where quick-commerce services are more prevalent. The All India Consumer Products Distributors Federation has expressed concerns about the unfavorable effects on small retailers.
In response to these challenges, Zepto has emphasized its role in creating job opportunities for gig workers and contributing to the economy. CEO Aadit Palicha stated, “From day one, our vision has been to play a small role in nation-building, create lakhs of jobs, and offer better services to Indian consumers.” However, the company and other quick-commerce firms may face regulatory hurdles due to current restrictions on foreign ownership in the e-commerce sector.
As Zepto continues to expand its operations and work towards its IPO, it remains to be seen how the company will navigate the regulatory landscape and address the concerns raised by traditional retailers. The future of quick-commerce in India is promising, but it will require careful planning and strategic decision-making to ensure sustainable growth and positive outcomes for all stakeholders involved.
