India-based instant grocery delivery startup Zepto has raised USD 200 million in a new funding round and became India’s first unicorn in 2023. The funding for Zepto's Series E round was led by StepStone Group, a significant investor in various venture funds, including Nexus Venture Partners.

This also marked StepStone Group's initial direct investment in the Indian market. In addition to StepStone Group, Goodwater Capital and existing backers such as Nexus, Glade Brook Capital, and Lachy Groom participated in the funding round. Previously valued at USD 900 million in May of 2022, Zepto has garnered approximately USD 560 million in total funding to date.

In this latest funding round, there were no secondary transactions, as stated by Zepto's co-founder and CEO. Unlike many instant delivery startups globally, which have experienced operational cutbacks, plummeting private valuations, or complete shutdowns, Zepto has managed to maintain its momentum. More information about Zepto Zepto emerged from stealth mode in November 2021, and the startup operates in seven Indian cities, processing over 300,000 orders daily across a range of products, from groceries to electronics according to TechCrunch.

Zepto relies on a network of dark stores located in various neighbourhoods, a model that has proven to be EBIDTA-positive for the majority of these stores. The company has reduced its expenditure and is working towards achieving EBIDTA positivity on a company-wide level within the next 12 to 15 months. Zepto has reported a 300% year-on-year growth in sales, with an annualised revenue exceeding USD 700 million.

As for its future goals, the startup aims to achieve USD 1 billion in annualized sales in the coming quarters. Zepto officials emphasised the importance of maintaining discipline and technological innovation as the company pursues its goal of going public by 2025. Despite the prevailing economic slowdown impacting investor appetite, Zepto's successful funding round stands out amidst a challenging landscape for Indian startups.

Data from market intelligence firm Tracxn reveals a decline in funding in the first half of 2023 compared to previous years. However, Zepto's success adds to the roster of Indian unicorns, having achieved a valuation exceeding USD 1 billion. In May 2022,  Zepto secured USD 200 million in funding and revealed its plans to expand to more Indian cities.

At the time, existing backer Y Combinator Continuity led Zepto’s Series D round, valuing the startup at about USD 900 million, up from USD 570 million in its December 2021 Series C round and USD 225 million in a round unveiled in late October 2021. .