Zepto considered selling most of its business to e-commerce leader Flipkart. However, price disagreements put a stop to the negotiations. Flipkart aimed for a buyout under $2 billion, but Zepto hoped for a minimum of $3 billion. Zepto’s worth was established at $1.4 billion only last year.
During discussions, Zepto was spending over $12 million monthly. This number has fallen to $5-7 million presently. “Zepto has shifted its marketing to increase in-store sales and slow down new store rollouts”. The Economic Times was the first to relay this news.
Zepto’s co-founder and CEO, Aadit Palicha, stated in the ET report that “Zepto is not taking on strategic investors currently” and that “we retain the majority of funds from the last round of investments.” As these events unfold, Flipkart is laying the groundwork for its upcoming fast-commerce project. The company is already worth $35 billion and has signed up around 40 dark stores in Bengaluru for a July launch.
Flipkart is also aiming for $1 billion in backing and already has $600 million from Walmart, its parent company. Earlier, a buyout of Dunzo by Flipkart, was also considered but didn’t move forward due to ownership issues, as Techcrunch revealed in February. Zepto attracts investors, such as Abu Dhabi Investment Authority and General Atlantic, for its ongoing fundraising efforts.
Their aim? To secure at least $300 million while eyeing a valuation of $2.5-3 billion. They has also gained attention from previous investors like Glade Brook Capital, Nexus Venture Partners, and Avra. A fund recently launched by Y Combinator’s former exec, Anu Hariharan. Y Combinator was an early supporter of Zepto and held the lead in its last round, owning a 14% stake.
“They have secured $150-180 million from existing investors, but require a large external backer to invest approximately $100 million. Otherwise, it’s only an internal round.”
Zepto accounts for $1.2 billion in gross annual sales, doubling each year. The firm manages close to 1,600 orders from each store daily. Further expansion now depends on factors beyond operating leverage. Such as more significant advertising revenues, improved take-rates, reduced delivery costs, and increased delivery charges. This information is based on a report by HSBC on Zepto. The HSBC study noted that Zepto and Zomato’s Blinkit snatches the quick commerce market from Swiggy’s Instamart.
