Indian quick-commerce startup Zepto has successfully raised $200 million in a Series E funding round, putting an end to the country’s 11-month-long unicorn drought. The funding round has boosted Zepto’s valuation to an impressive $1.4 billion, up from $900 million in May 2022. The lead investor in this round is the StepStone Group, a prominent US asset management firm. The funding marks a significant milestone for Zepto as it becomes the first unicorn of the year in India.
StepStone Group Leads the Charge
StepStone Group took the lead in the Series E funding round by contributing a substantial $75 million, a testament to its growing interest in the Indian startup ecosystem. The StepStone Group’s involvement in the round signals its first direct investment in the country. Alongside StepStone, Goodwater Capital also played a key role, investing $30 million in Zepto. This infusion of fresh capital from new investors demonstrates the appeal and potential of Zepto’s quick-commerce model.
Zepto Break in the Unicorn Drought
Zepto’s achievement of unicorn status in India this year is a notable occurrence, given the dearth of such valuations in the past 11 months. The last Indian startup to reach unicorn status was Molbio Diagnostics in September 2022. This milestone underscores the changing dynamics of the Indian startup landscape, with investors adopting a more discerning approach to their investments in recent times.
Changing Investment Landscape in India
India experienced a period of rapid unicorn growth in 2021, with nearly one new unicorn emerging every week. However, the investment landscape shifted, and funding became more selective in subsequent years. In 2022, 23 startups achieved unicorn status, marking a decrease from the previous year. Investors’ cautious approach has contributed to a more measured pace of valuation growth, indicative of the maturity of the ecosystem.
Zepto Investor Insight and Future Prospects
Zepto’s funding round included participation from both new and existing investors. While StepStone and Goodwater Capital entered the scene, Zepto also garnered continued support from existing backers like Nexus Venture Partners, Glade Brook Capital, and Lachy Groom. Aadit Palicha, co-founder of Zepto, emphasized the significance of experienced and detail-oriented investors who bring stability and perspective to the funding landscape. Zepto’s future includes plans to attract more India-centric investors and continue its growth trajectory in the dynamic Indian market.
