19-year-old Stanford dropouts’ Zepto now valued at $900 million after it raises $200 million
Zepto, a grocery startup that delivers food and essentials within 10 minutes, has raised $200 million in fresh funding to fuel its expansion plans across India. The company is aiming to grow its presence in 20 new cities by the end of 2022 and serve 1 million customers in the next 12 months.
Instant grocery startup Zepto, founded by two teenagers, has raised $ 200 million in a funding round led by Y Combinator, which has grown to $ 900 million within nine months of launching a 10-minute delivery in India’s fastest growing commercial segment.
New investor Kaiser Permanente took part in the round, which comes less than five months after the startup raised capital.
A ten-minute grocery delivery startup, Zepto founded by Adit Palicha and Kaivalya Vohra, who dropped out of Stanford University and childhood friends, has raised $ 200 million in a series D round led by Y Combinator.
The nine-month-old startups of Palicha and Vohra, are now valued at $ 900 million. In its Series C round, the Zepto was valued at $ 570 million.
Zepto is now launching a new service called ‘Zepto Cafe’ on a pilot basis to deliver coffee, chai tea and other cafe items within 10 minutes to selected areas in Mumbai.
New investor Kaiser Permanente joined the latest round with existing supporters, including Nexus Venture Partners, Lechi Groom, and Glad Brook Capital.
Zepto is one of the fastest-growing startups in India. Its unique business model allows customers to order any food or essentials they need within minutes through an app, and have them delivered by bike couriers at their doorstep within 10 minutes.
Zepto was started by childhood friends Adit Palicha and Kaivalya Vohra, who left Stanford University to return to India from the computer science program and become e-commerce entrepreneurs.
Both are 19 years old. The Mumbai-headquartered company’s 10-minute delivery promise has boosted competitors such as Google-backed Dunzo, Softbank Group Corp-backed.
Zepto’s revenue grew 800% quarter-on-quarter and reduced its cash burn per order fivefold, Chief Executive Officer Palicha said in a statement.
The startup team has expanded to 1,000 people and has begun to make a profit in the dense city neighborhoods served by small micro markets or warehouses or dark stores.
Since it launched its first service in Bengaluru just two years ago, the startup has expanded to 20 cities across India and now delivers over 1 million orders per month. The company plans to use the new funding to further expand its reach and grow its team.
“There is a massive opportunity in the Indian food delivery market, which is currently worth $15 billion and is expected to grow five-fold to $75 billion by 2022.
We are excited to tap into this opportunity and bring our unique 10-minute delivery service to more cities across India,” said Zepto co-founder and CEO Aadit Palicha.
The company has raised a total of $250 million to date, including a $50 million investment from Tiger Global in 2018.
The company is one of the most well-funded grocery startups in India, and its recent fundraise puts it in a strong position to compete with the likes of BigBasket, Grofers, and Amazon in the country’s rapidly-growing online food delivery market.
Another Zepto rival, Gurugram-based Blinkit (formerly known as Grofers), is in the advanced stages of closing a merger with food delivery application Zomato after struggling to raise new capital from outside investors amid increased competition.
According to Aadit Palicha, Zepto will also use the funds to deliver its products and tech teams to more than 1,000 people in a few months, including engineering, analytics, operations, marketing, finance and human resources.
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Aadit Palicha said Zepto is on track to close the current financial year at $ 1 billion gross merchandise value (GMV).