Indian online retailer Unicorn Zepto plans to double the number of sales outlets after raising $3.6 billion in funding

Mumbai-based fast-trading company Zepto plans to double its warehouses – called dark stores – across India to 700 stores by March 2025, after achieving a valuation of $3.6 billion in its latest fundraising announced on Friday. This is approximately 2.6 times higher than the valuation made in the previous financing round.

Zepto was founded in 2021 by 19-year-olds Aadit Palicha and Kaivalya Vohra, who dropped out of a non-relegating computer science program at Stanford University to start a grocery delivery service. It has since expanded into providing everything from clothing to toys, and has become one of India’s largest fast-commerce players in terms of gross merchandise value, competing with the likes of Zomato’s Blinkit and Swiggy’s Instamart, as well as BigBasket’s BigBasket-led BBnow Tata Group.

“This dynamic, with stores achieving increasing profitability, has enabled Zepto to grow rapidly while achieving near positive EBITDA at the company level,” Palicha, co-founder and CEO of Zepto, said in a statement. “We plan to continue to operate with fiscal discipline as we increase our store count from 350 to 700, reinvesting capital generated in mature stores back into the business.”

As of May, Zepto is on track to deliver more than $1 billion in GMV in the current fiscal year ending March 2025, with approximately 75% of its warehouse locations already achieving operating profit. He added that stores now take six months to achieve profitability compared to 23 months previously.

Palicha, who along with Vohra was included on Forbes’ 30 Under 30 Asia list in 2022, said that if the momentum continues, the company “will be ready to go public relatively soon.”

In the latest round of financing announced Friday, Zepto raised $665 million from new investors including private equity firm Avenir, venture capital firm Lightspeed and Avra, a new fund started by former Y Combinator Continuity chief Anu Hariharan. Existing investors including Glade Brook Capital Partners, Nexus and StepStone Group also participated in the round, the Indian unicorn said in a statement. This round comes just nine months after the company raised $235 million at a valuation of $1.4 billion in December.

“Zepto is redefining e-commerce in India with exceptional product-market fit and world-class execution and innovation,” Paul Hudson, Glade Brook’s chief investment officer, said in a statement.

—With reporting by Anu Raghunathan