• Indian grocery delivery startup, Zepto, raised $350 million in its latest funding round, marking its third in just five months.
• The funding round, the largest 100% domestic fundraise in India's startup ecosystem, was led by Motilal Oswal's Private Wealth division.
• The quick commerce sector in India is booming, with Zepto planning to double its dark stores to 700 by March 2025.
• Zepto's successful fundraising highlights the growing demand for quick commerce in India and the faith of domestic investors in digital businesses.

Indian grocery delivery startup, Zepto, has made headlines with its latest funding round, raising a staggering $350 million. This marks the third round of funding for the Bengaluru-based company in just five months, a testament to the growing demand for quick commerce in India. Despite the influx of capital, Zepto's valuation remains steady at $5 billion, a figure that underscores the company's robust position in the market.

Zepto's fundraising journey has been nothing short of impressive. Earlier in the year, the company raised $665 million in June, followed by another $340 million in August. Both rounds contributed to the company's $5 billion valuation. To date, Zepto has raised over $1.9 billion, according to data from information provider Tracxn.

Zepto's Funding and the Rise of Quick Commerce

The latest funding round was spearheaded by Motilal Oswal's Private Wealth division, with participation from the family offices of Mankind Pharma, RP Sanjiv Goenka Group, Haldiram Snacks, and notable individuals including Indian cricketer Sachin Tendulkar and actor Abhishek Bachchan. This round of funding is particularly noteworthy as it marks the largest 100% domestic fundraise in India's startup ecosystem.

The quick commerce sector in India is experiencing a surge, disrupting traditional sales channels like mom-and-pop stores. Research firm Datum Intelligence predicts that the domestic quick commerce sector will report annual sales of around $6 billion this year, a significant increase from $3.5 billion in 2023. Zepto competes with other quick commerce platforms like Zomato's Blinkit and Swiggy's Instamart. However, the sector has also seen new entrants like Mukesh Ambani-owned Reliance.

The Future of Quick Commerce

The rapid growth of the quick commerce sector has been fueled by the demand for instant deliveries. Companies like Zepto, Blinkit, and Swiggy's Instamart have expanded their network of dark stores and product range to meet this demand. Zepto plans to use the capital to double the number of its dark stores, or warehouses, to 700 by March 2025.

CEO Aadit Palicha revealed that nearly 75% of Zepto's 350 stores are Ebitda-positive (or operationally profitable), and the company has managed to reduce the time it takes for its dark stores to become profitable from nearly two years to six months. The quick commerce sector's growth is not just limited to India. The global demand for eGrocery services has not significantly declined since the pandemic ended. In fact, it's expected to grow in the next few years.