Indian grocery startup Zepto has raised $200 million in fresh funding that values the company around $900 million.
Zepto’s latest funding round was led by existing investor Y Combinator with participation from U.S.-based healthcare giant Kaiser Permanente, and all of Zepto’s key existing investors including Nexus Venture Partners.
Zepto competes with SoftBank-backed Blinkit in India, Zepto and Blinkit promise 10-minute deliveries for groceries. Other rivals including Dunzo, backed by Indian billionaire Mukesh Ambani’s Reliance, and SoftBank-backed Swiggy are all betting on fast deliveries in the quick commerce sector.
Zepto is offering services in 11 cities and plans to use the new funds to expand to as many as 24 new cities within the next quarter.
Research firm RedSeer says India’s quick commerce sector, worth $300 million last year, will swell 10-15 times to $5 billion by 2025. India’s overall grocery retailing industry is far bigger and worth an estimated $600 billion.
Reuters reported that Zepto currently records monthly average revenue of $12 million, but spends about $8 million in marketing, promotion and other activities like free deliveries each month.