Quick-commerce player Zepto builds $1 bn war chest to take on competition

Quick-commerce player Zepto is set to raise $450 million, valuing the firm at $7 billion and leading to the creation of a war chest of $1 billion, according to sources in the know. 

The current round, a mix of primary and secondary, is being led by United States pension fund Calpers and includes existing investors General Catalyst, Avra, Lightspeed, StepStone, and Nexus Venture Partners. 

So far the company has raised $2 billion at a valuation of $5 billion. Last year, the firm had raised $1.35 billion. The need to create a war chest of $1 billion comes at a time when competition in quick commerce is hotting up, especially with the two largest ecom players — Amazon and Flipkart — entering the space.

 

Sources added Zepto had significantly reduced its cash burn, which is why it had been able to have $1 billion in cash. “Zepto was burning around ~180 crore every quarter. However, since May this has been brought down to double digits. One reason for this has been the new revenue layers the company has built,” said a source.  

 

Some revenue layers include advertisement and the launch of private labels on the platform.

 

In April this year, Aadit Palicha, cofounder and chief executive officer of the company had said the advertisement vertical had seen an annual revenue run rate of $200 million. Last year this was around $40 million, said Palicha in an interview with Y Combinator’s Garry Tan.

 

“Verticals like advertisement, which have turned profitable, have helped the firm to reduce its cash burn. Add to this the fact that several marketing campaigns on its platform are cofunded with the brands,” said the source.

 

The need to have a war chest is also because its immediate competitors are sitting on a huge cash pile and have been expanding their dark stores. For instance, the cash that Eternal, parent firm of Blinkit, has as on March 31, 2025, is $3.3 billion. Swiggy has $1.1 billion.

 

Media reports say Tata Sons is looking to raise around $1.3 billion for its digital platforms BigBasket and Tata 1mg.