With daily orders surging and profitability in sight, Zepto secures a major round led by U.S. pension giant CalPERS and sets sights on an IPO in 2026.
Zepto Lands $450M as It Prepares to Go Public
Zepto, one of India’s fastest-growing quick-commerce startups, has raised $450 million in a new funding round at a $7 billion valuation. The round, which includes $400 million in fresh capital, was led by CalPERS, marking a rare direct investment by the U.S.-based pension fund.
- Existing investors — Avenir, Avra, Lightspeed, Glade Brook, StepStone, and Nexus Venture Partners — also participated.
- The round includes both primary and secondary transactions, giving early backers partial exits.
“This round validates our model of profitable dark stores and our ability to scale efficiently,” said CEO Aadit Palicha, as the company plans a public offering next year.
Zepto’s Growth Metrics Show Explosive Momentum
Zepto’s growth trajectory has been steep:
- Daily orders jumped from 500,000 to 1.7 million in just over a year.
- The company has 10 million+ monthly transacting users.
- Zepto now operates over 1,000 dark stores across 80+ cities in India, with plans to add hundreds more within 12 months.
Although metro cities still account for the majority of orders, 20% now come from smaller towns, signaling growing Tier-2 and Tier-3 adoption.
Standing Out in a Crowded Market
Zepto is navigating a fierce competitive landscape:
- It battles Blinkit (Zomato-owned), Swiggy Instamart, and Tata’s BigBasket — all part of publicly listed parent firms.
- It also competes with Flipkart and Amazon, which are expanding their rapid delivery services.
- Verticalized delivery startups like Swish, Zing, Silkk, and FirstClub are rising in niches like fashion, food, and home services.
Despite that, Zepto has managed to retain a lead in key metros through efficiency-focused expansion and category diversification.
Zepto Café Faces Roadblocks but Shows Promise
Zepto’s food delivery arm, Zepto Café, faced staffing issues that led to pausing service in 44 cities.
- The company has since resumed operations in some locations, though specifics weren’t disclosed.
- Zepto Café has grown into a $110 million run rate business, showing promise as a complementary vertical.
This suggests that food delivery remains a strategic focus, even as the company prioritizes groceries, electronics, and essentials.
App Growth and UI Challenges
Zepto is also investing in personalization and feature expansion within its app:
- Offers like Super Saver (bulk order discounts) are driving value-conscious user adoption.
- However, the cluttered app interface has drawn criticism. Palicha acknowledged the issue and confirmed UI simplification efforts are underway.
“We’re working on streamlining the interface to make it easier for users to navigate across categories,” he said.
CalPERS Makes a Rare, Bold Move
The funding marks a significant shift for CalPERS, which usually invests in startups via venture funds, not direct deals.
- Since 2022, the fund has ramped up venture exposure from $800M to a target of $5B, after calling the prior decade a “lost opportunity.”
- CalPERS is already exposed to Zepto through stakes in Lightspeed and General Catalyst — making this direct investment a deeper strategic play.
The decision to back Zepto signals institutional confidence in India’s quick-commerce future and growing interest in emerging markets from U.S.-based funds.
Market Outlook: $42B to $100B Industry by 2035?
Analysts remain bullish on India’s quick-commerce space:
- Morgan Stanley estimates it could grow to $42B by 2030.
- Bernstein is more aggressive, forecasting a $100B market within a decade, especially in metros where quick delivery is already the norm for groceries and essentials.
With Blinkit already surpassing Zomato in gross order value and Swiggy now publicly listed, Zepto’s race to IPO in 2026 is timely and strategically significant.
