Zepto raises $450 Mn led by CalPERS; plans IPO next year
Announcement
What: Quick-commerce unicorn Zepto has successfully closed a funding round of approximately $450 million.
Valuation: This latest funding round was done at a $7 billion valuation, a significant increase from its previous valuation of $5 billion.
Lead Investor: The round was led by the U.S. pension fund California Public Employees' Retirement System (CalPERS), marking a rare direct investment by the fund in a startup of this nature.
Other Participants: Existing investors, including Avenir, Avra, Lightspeed, Glade Brook, The Stepstone Group, and Nexus Venture Partners, also participated.
Nature of Fundraise: The funding is a mix of primary capital infusion (new shares) and secondary transactions (sale of existing shares).
How
Financial Position: With this capital infusion, Zepto has built a substantial war chest of approximately $900 million in net cash, making it "more than well-capitalized for the future," according to CEO Aadit Palicha.
Business Performance: The successful raise is attributed to the company's strong execution and growth, demonstrated by:
Scaling daily orders from about 500,000 orders five quarters ago to currently around 1.6–1.7 million orders per day.
Achieving profitability in a majority of its 'dark stores' (micro-warehouses), with the CEO noting they closed the financing with more profitable stores than their entire network had last year.
Substantial revenue growth, doubling to around ₹4,454 crore in FY24 from ₹2,026 crore in FY23, while slightly narrowing its losses.
When
Announcement Date: The funding round was officially announced on Thursday, October 16, 2025 (based on the current context).
IPO Target: Zepto is viewing this as a "pre-IPO round" and plans to file for an Initial Public Offering (IPO) soon, targeting a public listing next year (likely 2026). Some reports suggest they aim to file draft papers by March-April of the next year.
Planning or Strategies
Capital Utilisation: The funds will be primarily used for:
Maintaining a healthy balance sheet and ensuring financial stability.
Supporting moderate expansion of its operations.
Improving the bottom line and continuing to grow order volume while increasing profitability.
Expansion & Network: A portion of the capital will go toward launching a few hundred new stores over the next 12 months (or the next five months, as per some reports) to strengthen its delivery network and capture more market share.
IPO Preparation: The company has been taking strategic steps to prepare for its public debut in India:
Re-domiciling to India: It has shifted its corporate domicile from Singapore to India, a necessary step for listing on Indian stock exchanges.
Increasing Domestic Ownership: The company plans to increase its domestic ownership within the company to 40% from the current 12% in the coming weeks.
Focus on Profitability: A core strategy has been to balance rapid scale with operational efficiency, focusing on making its dark stores profitable, which is a key factor for a successful IPO.
Product Diversification: Zepto is also expanding its product categories beyond groceries and food items, having launched Zepto Pharmacy and potentially looking to include consumer electronics and general merchandise in the future.