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    Home»Business»Ten-minute Delivery App Zepto Gets $665M At A Valuation Of $3.6B
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    Ten-minute Delivery App Zepto Gets $665M At A Valuation Of $3.6B

    DavidBy DavidJune 21, 2024Updated:June 21, 2024No Comments5 Mins Read
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    Ten-minute Delivery App Zepto Gets $665M At A Valuation Of $3.6B
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    Zepto raised a huge $665 million in new funding, bringing its value from $1.4 billion to $3.6 billion, which is more than doubling in less than a year. The Mumbai-based startup is now putting even more effort into taking over India’s competitive quick commerce market.

    People in towns in India can quickly buy and get delivered anything from groceries to electronics through Zepto. India is a great place for the rapid-delivery model to work, but most startups in developed markets have failed in this area.

    It was led by Glade Brook, Nexus, and StepStone Group, and Zepto said it was “highly oversubscribed.” The round was also backed by previous backers Goodwater, Lachy Groom, and Contrary, as well as new funds Avra (run by former YC Continuity executive Anu Hariharan) and Avenir.

    Two people familiar with the issue say that DST Global, which helped fund Swiggy, a competitor of Zepto, from the start, also co-led the new funding round. Zepto didn’t say anything about DST Global’s involvement in the new funding round and wouldn’t say anything else.

    In the quick commerce space, Zepto goes up against BlinkIt (owned by Zomato) and Swiggy’s Instamart.

    These companies that offer fast shipping have set up a lot of secret warehouses, called “dark stores,” all over urban India. By strategically putting these facilities within a few miles of commercial and residential places with high demand, they can fill orders right away after they are bought.

    Along with Will Robbins, a partner at Contrary, who wrote the thesis, Zepto can open more stores across a city because they take up less room than regular storefronts. This means that delivery times are shorter.

    By March 2025, Zepto wants to have more than 700 dark shops in its network. The new business said its sales have gone up 140% since last year and that its yearly gross merchandise value (GMV) is on track to go over $1 billion. It has more than 50,000 service partners, and every month it adds more than 5,000 more.

    As of last month, the company said that about 75% of its dark shops were making money. Zepto said that because of better efficiency and scale, it only takes six months for a dark store to become profitable, whereas it used to take 23 months.

    Many investors and experts were surprised by the growth of quick commerce companies in India, which has a $4 trillion economy. This is because many similar businesses have failed in other markets.

    Zepto, a 10-minute delivery app, raises $665 million at $3.6 billion valuation https://t.co/otZ0eKWgB2 #Technology #bhivelabs

    — BHIVE Tech Bee (@TechGeekTweets) June 21, 2024

    “In India, it’s common to buy things that are very close to home.” In other parts of the world, this doesn’t exist. India’s customers buy small things several times a week in a hyper-local way. “Quick commerce gives them hyper-local, high-proximity, and low-ticket use cases,” Aadit Palicha, co-founder and CEO of Zepto, told TechCrunch. “No other grocery store format, even in the real world, has been able to offer customers the same things.”

    India’s quick commerce startups are starting to do more than just bring groceries. One company says it will send expensive items like smart phones and game consoles to customers in 10 minutes.

    Palicha and Kaivalya Vohra started Zepto when they were both 19 years old. They said that Zepto does sell chargers and cables for electronics, but they don’t want to sell high-end electronics on their website.

    “We’re not really interested in laptops, smartphones, or expensive clothes.” We are more interested in buying things like household tools, underwear, general merchandise, toys, beauty and cosmetics, and home and kitchen goods where the stakes aren’t as high. “That strikes a chord with us,” Palicha said.

    The new business is now active in the biggest cities in India. In the next few months, it plans to grow to some smaller cities as well. Palicha said Zepto is happy with how well it’s been received so far in places like Jaipur, where traditional businesses aren’t meeting all of their customers’ needs.

    A statement from him said, “If we can do this while still making customers happy, I think we will be ready to go public pretty soon.”

    Avenir, a venture capital company based in New York, had been keeping an eye on Zepto for about three years before investing in this round. Ben Jubas, a partner at Avenir, said that Zepto can break the problems that Indian stores usually have with trade-offs.

    He told TechCrunch, “It has a chance to become a huge commerce business because of how deep its value proposition is and how rigorously it runs its business.” “It’s the best, in our opinion.”

    Some experts in the field think that quick commerce companies will take away a lot of the market share from big e-commerce companies like Amazon and Flipkart. Jubas said that he agrees with this theory, but it’s up to Zepto’s management to decide what to do with it.

    Also Read: Tokyo’s Uber Eats Will Use Cartken’s Sidewalk Robots to Start a Delivery Service

    Goldman Sachs says that quick commerce companies in the top 40 to 50 cities can reach a total market size of $150 billion in food and non-grocery items.

    What do you say about this story? Visit Parhlo World For more.

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