Zepto, a rapid commerce startup founded by two 19-year-old Stanford dropouts nine months ago, has raised $200 million in a Series D funding round, valuing the company at about $900 million. Zepto intends to use the funds to expand 10-minute grocery delivery across the country and continue to grow responsibly.
Y Combinator Continuity doubled in and spearheaded rapid commerce Zepto’s Series D, with Kaiser Permanente joining the company as a new investor. All of the company’s previous investors have upped their stakes, including Nexus Venture Partners, Glade Brook Capital, and Lachy Groom, signaling yet another vote of confidence in the company’s prospects.
The funding would also help Zepto compete with companies like Dunzo, Swiggy, Zomato, Amazon, and Flipkart, which are all spending big on the country’s quickly rising online food sector.
“The core of what we’re doing is delivering groceries in 10 minutes,” said Zepto co-founder and CEO Aadit Palicha in an interview. “The way we do that is through a network of highly optimized delivery centers. We have scaled to millions of customers across the country. Today, we’re doing hundreds of thousands of orders a day. We have achieved a scale that took food delivery players years to achieve and we did that in a few months. The business continues to grow at a very fast pace.”
According to Palicha, Zepto’s revenue increased by 800% QoQ (quarter-over-quarter), but burn decreased by 5X on a per-order basis. He claimed that at scale, the company had an 88-point NPS (net promoter score) and 60% Month-1 Buyer Retention.
The company has secured $360 million in total from well-known investors in Silicon Valley and India. In just a few months, the company claims to have established an all-star bench of executive talent and expanded its team to over 1,000 individuals. The funds will allow it to continue hiring across all departments, including engineering, analytics, operations, marketing, finance, and human resources.
What sets Zepto apart, according to the company, is its capacity to regularly supply over 3,000 products in under 10 minutes. The goal is to establish 10-minute delivery as the new standard.