Indian Grocer Zepto Nets $200M for Expansion

Zepto, the Indian grocery startup, has said it’s raised new funding of $200 million, a Reuters report says.

This values the company at around $900 million.

Reuters writes that the company has been benefiting from new investor interest in the sector where companies have been winning customers over with faster deliveries — now down to just 10 minutes.

Co-founder and CEO Aadit Palicha told Reuters that the company is now offering services in 11 cities, planning to use the funds to boost to as many as 24 new cities within the next quarter.

“The scale that took food delivery companies years to achieve has taken us months (with groceries). That’s the benchmark most people use, and the market size for groceries is far bigger,” Palicha said

Zepto was started in 2021 by two Stanford dropouts, both 19 years old.

Zepto’s competition includes Blinkit in India, backed by SoftBank, which also promises 10 minute deliveries.

Faster deliveries are quickly becoming the norm, though, with other companies like Dunzo and Swiggy also pivoting to try and speed up the deliveries.

Reuters wrote that tech startups in the country have been drawing in big interest from foreign investors who want to cash in on a growing use of digital payments, internet and other new tech in the market.

But there could be issues in the future, with quick deliveries raising concerns of road safety — India is home to some of the world’s most accident-prone roads.

PYMNTS wrote that Dunzo has raised $240 million in a funding round.

See more: India’s Quick Commerce Startup Dunzo Raises $240M Led by Reliance

The round was led by Reliance Retail, which put in $200 million for a 25.8% stake in the company. The company plans to use Dunzo to provide deliveries from the group’s retail stores along with various neighborhood grocers.

With the new capital, Dunzo plans to keep going with its goal of being “the biggest quick commerce company in India” and will also grow its B2B unit.