Zepto raises $450 million at $7 billion valuation as Indian express trade market soars

Indian fast-commerce startup Zepto said it has raised $400 million in a funding round led by a new investor, California Public Employees Retirement System (CalPERS), a US-based pension fund. The round, a mix of primary and secondary investment, also has participation from existing investors, including Avenir, Avra, Lightspeed, Glade Brook, The Stepstone Group and Nexus Venture Partners. After this financing, the company plans to go public next year.

Zepto competes with other flash commerce players like Eternal’s (formerly Zomato) BlinkIt, Swiggy Instamart and Tata-owned BigBasket – all of which are part of publicly listed companies. The startup has been in a state of funding, raising $1.3 billion within several months last year. Since Zepto’s last funding round in November 2024, Swiggy has made its debut on the Indian stock exchange, overtaking Blinkit Zomato in total order value (total value of customer orders) for Q1 2025.

The company also faces competition from legacy e-commerce players like Flipkart and Amazon, which have started their own express commercial delivery services.

Startups are also looking at vertical e-commerce offerings. Accel-backed Swish and Zing are in the food delivery space; Nykaa, Myntra, Silkk and Blip, owned by listed Flipkart, want to deliver clothes to customers within an hour; Snapbit powered by Lightspeed allows users to book home services such as cleaning within 10 minutes; And startups like FirstClub are taking a regulatory approach to grocery delivery.

Zepto and CEO Aadit Palicha are confident about the startup’s growth. Palesha said the company rose from 500,000 daily orders five quarters ago to 1.7 million daily orders and he expected the growth to continue.

“The key metric for this round of funding was our ability to turn dark stores profitable with the acquisition of over 10 million new converting monthly users. We’ve obviously invested increasingly in customer acquisition and store launches. But even as you do that, we’ve been able to continue to turn stores profitable,” Palesha told TechCrunch.

BlinkIt, Instamart, and Zepto operate in many of these places, with food delivery being the most notable. However, Zepto had to temporarily halt Zepto Cafe offerings in 44 cities due to staffing challenges.

Signs of a fast-trading market are encouraging in India. Morgan Stanley expects the flash trade market to reach $42 billion by 2030. It could reach $100 billion in a decade, Bernstein said in a note in March. The analysis firm also noted that walk-in trade in target markets is the primary way people buy groceries now.

Zepto has largely focused on major cities in India in terms of expanding services. JPMorgan noted earlier this month that BlinkIt has a dark store network of warehouses to fulfill online orders in over 204 cities, compared to Swiggy Instamart in over 104, and Zepto in over 80 cities in India.

The investment is a notable one for CalPERS. The pension fund typically invests in venture capital through intermediate funds rather than leading direct investments in startups. CalPERS has been aggressively expanding its project exposure since 2022 after what officials called a “lost decade” of poor performance, expanding its project allocation from about $800 million to a targeted $5 billion. The fund’s decision to lead a round in an Indian express commerce startup appears to indicate strong institutional confidence in India’s express delivery sector and perhaps CalPERS’ growing appetite for direct investments in emerging markets as well. It is worth noting that CalPERS is also an investor in the funds of Zepto’s existing backers, such as Lightspeed and General Catalyst.