Fast commerce platform Zepto raised $350 million in its third funding round this year, led by Motilal Oswal Private Wealth. The funding round attracted investments from leading investors and family offices including Motilal Oswal AMC and Raamdeo Agarwal, Taparia Family Office, Mankind Pharma Family Office, RP Sanjiv Goenka Group, Cello Family Office, Haldiram Snacks Family Office, Sekhsaria Family Office, Kalyan Family. Office, Happy Forgings Family Office and Mothers Recipe Family Office (Desai Brothers). Famous investors such as Sachin Tendulkar and Abhishek Bachchan also participated.

Zepto’s valuation remains stable at $5 billion. This funding adds to Zepto’s impressive 2024 trajectory, which has seen the company raise over $1 billion.

Acknowledging this milestone, Aadit Palicha, CEO and Co-Founder of Zepto, said: “We are honored to have reached a point in India’s economic growth where we have not only fostered this confidence, but also led a fundraising of this magnitude, which we hope will set a precedent for startups that follow.

In late August, Zepto raised $340 million in a funding round led by General Catalyst and Dragon Fund, with Epiq Capital joining as a new investor. Existing investors such as StepStone, Lightspeed, DST Global and Contrary have also increased their stakes.

Founded in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto, linked to its IPO, sells more than 25,000 products ranging from groceries to electronics, with a promise of delivery in just 10 minutes. The company operates through a network of dark stores and delivery centers across the country. Currently active in over 17 cities, Zepto has over 550 dark stores and processes over 700,000 orders daily. The platform supports 56,000 delivery partners and 30,000 employees in its delivery network and has empowered 20,000 farmers, with over 5,000 employees supporting its rapid expansion.

Speaking to CNBC-TV18 in August, CEO and co-founder Aadit Palicha said the company is preparing for a possible IPO in the next 18 to 24 months.

“I think 2026, or even the end of 2025, is a realistic timeline,” Palicha said, noting that the “sweet spot” for the IPO would be when Zepto begins generating “significant amounts of free cash flow “. He added: “Today, it’s not about profitability. Investors are betting on our ability to generate $300 million to $500 million in free cash flow in a reasonable time frame.

Financially, Zepto is growing rapidly, with FY24 sales expected to exceed ₹5,000 crore, double the ₹2,500 crore reported in FY23.

This significant fundraising comes in a context of fierce competition from competitors such as Blinkit (owned by Zomato), Swiggy Instagramand BigBasket, all ramping up their fast commerce operations. Competition from e-commerce majors Amazon and Flipkart is also adding to the frenzy. Swiggy Instamart, in particular, accelerated its growth after Swiggy’s meteoric debut on the stock market.

A report by Motilal Oswal highlights the intense battle in the fast-moving trade space.

Although Swiggy Instamart is the pioneer in the segment, Blinkit has a market share of 46% as of Q1FY25. Zepto follows with a share of 29%, and Swiggy Instamart is third with 25%.

According to a report by Datum Intelligence, the fast commerce market is expected to grow from $6.1 billion in 2024 to $40 billion by 2030, driven by the promise of deliveries in 10 to 30 minutes. The report notes that more than 82% of consumers have shifted at least a quarter of their kirana purchases to fast commerce platforms, and 5% of them have abandoned kirana stores altogether, a trend that threatens to reshape the landscape of retail.

This rapid expansion has attracted attention. The Ministry of Consumer Affairs expressed concerns about the impact on small businesses and kirana stores, which remain vital to local economies.

Kotak Mahindra Bank founder Uday Kotak echoed these sentiments at CNBC-TV18’s Global Leadership Summit, describing fast commerce as a growing challenge for traditional retail. “This challenge could eventually become a political problem,” he warned.

On November 13, the Confederation of All India Traders (CAIT) released a white paper accusing fast commerce platforms of misusing foreign direct investment (FDI) to control supply chains, inventory and prices, thereby disadvantaging small retailers and threatening the survival of 30 million of Kirana stores.

“These platforms are aggressively pushing small retailers out of business,” said CAIT general secretary and Chandni Chowk MP Praveen Khandelwal, denouncing their reliance on FDI to subsidize losses and indulge in illegal practices. predatory.