StepStone Group First India Investment Turns Zepto into Unicorn

26 Aug, 2023

New York-based StepStone Group, a prominent player in private markets investment, has emerged as a driving force behind a significant milestone for Indian start-up Zepto.

The renowned investment firm led a remarkable $200-million Series E funding round, which not only underscored its prowess but also propelled Zepto to coveted unicorn status within India's dynamic business landscape. Zepto, a nimble player in the quick commerce sector, found itself valued at a substantial $1.4 billion as a result of this strategic alliance.

What makes this collaboration truly noteworthy is StepStone Group's decision to mark its maiden foray into the Indian market with this pivotal investment. Their involvement was complemented by the entry of Goodwater Capital, a California-based venture capital firm with a strong focus on consumer-centric ventures. Long-standing supporters of Zepto, including Nexus Venture Partners, Glade Brook Capital, and Lachy Groom, further reinforced their confidence by making substantial follow-on investments.

This infusion of capital arrives as a breath of fresh air within a landscape grappling with the complexities of fundraising, particularly in light of the ongoing economic challenges. Additionally, it signifies a turning point for the swift delivery sector, an area notorious for its high cash burn model. Industry giants like Swiggy’s Instamart, Zomato’s Blinkit, and Tata-owned BigBasket have navigated away from their initial 10-minute delivery approach and have even shuttered unprofitable dark stores to streamline their operations.

Zepto's remarkable performance shines through as it claims to have transitioned a majority of its dark stores into a fully positive EBITDA state. The company's concerted efforts have substantially reduced its burn rate, paving the way for an anticipated transition to full EBITDA positivity within the next 12 to 15 months. With an impressive year-on-year sales growth of 300 percent, Zepto seems poised to achieve the remarkable milestone of $1 billion in annualized sales over the next few quarters.

Aadit Palicha, Co-founder & CEO of Zepto, expressed his enthusiasm for the journey ahead, emphasizing the company's commitment to robust execution and a customer-centric ethos. Zepto's ambitions don't stop here; the company has boldly stated its intent to go public by 2025, armed with profitability and a visionary approach that speaks to building a legacy enterprise. This announcement encapsulates not an endpoint, but rather a promising beginning for Zepto's trajectory as a generational industry player.

Related News

Interview