Indian quick-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 U.S.-based pension fund. The round, which is 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 funding, the company plans to go public next year.
Zepto competes with other quick-commerce players such as Eternal’s (formerly Zomato) Blinkit, Swiggy Instamart, and Tata-owned BigBasket — all part of publicly listed companies. The startup has been on a funding spree as it picked up $1.3 billion in a span of several months last year. Since Zepto’s last funding round in November 2024, Swiggy made its public debut on India’s stock exchange, and Blinkit surpassed Zomato in gross order value (the total value of customer orders) for Q1 2025.
The company also faces competition from legacy e-commerce players such as Flipkart and Amazon, which have started their own quick-commerce delivery services.
Startups are also looking at verticalized e-commerce offerings. Accel-backed Swish and Zing are operating in the food delivery space; publicly listed Nykaa, Flipkart-owned Myntra, Silkk, and Blip want to deliver apparel to customers in an hour; Lightspeed-backed Snabbit is allowing users to book home services like cleaning within 10 minutes; and startups like FirstClub are taking a curation approach to grocery delivery.
Zepto and its CEO, Aadit Palicha, are confident about the startup’s growth. Palicha said that the company has scaled from 500,000 daily orders five quarters ago to 1.7 million daily orders and predicted that the growth will continue.
“The key metric for this round of funding was our ability to turn dark stores profitable while acquiring over 10 million new monthly transacting users. We obviously invested incrementally in customer acquisition and store launches. But even as you were doing that, we were able to keep turning stores profitable,” Palicha told TechCrunch.
Blinkit, Instamart, and Zepto operate in many of these spaces, with food delivery being the most notable one. However, Zepto had to pause its Zepto Cafe offering in 44 cities due to staff challenges. While the company didn’t specify how many cities it has resumed operations in, it said Zepto Cafe is a business of over $110 million in run rate and growing rapidly.
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Signs for the quick-commerce market are encouraging in India. Morgan Stanley predicts the quick-commerce market could reach $42 billion by 2030. Bernstein said in a note in March that it could reach $100 billion in a decade. The analyst firm also noted that in target markets, quick commerce is the primary way people are buying groceries now.
Zepto has largely concentrated on major cities in India in terms of expanding services. J.P. Morgan noted earlier this month that Blinkit has its dark store network of warehouses to fulfill online orders in more than 204 cities, compared to Swiggy Instamart in over 104, and Zepto in over 80 cities in India. Zepto has over 1,000 stores in these cities and plans to add hundreds of stores over the next 12 months.
The startup noted that while the majority of its business comes from metro cities, it is now receiving close to 20% of total order volume from smaller cities.
On its app, Zepto has focused on showing off its offerings like Super Saver, which gives users additional discounts on groceries for large orders, and highlighting categories like electronics, fashion, and decor. But this has made the app cluttered. Palicha acknowledged that and said the company will make changes to interface to simplify the app in coming months.
The investment is a notable one for CalPERS. The pension fund typically invests in venture capital through intermediary funds rather than leading direct investments in startups. CalPERS has been aggressively expanding its venture exposure since 2022 after what officials called a “lost decade” of underperformance, scaling its venture allocation from around $800 million to a targeted $5 billion. The fund’s decision to lead a round in an Indian quick-commerce startup seemingly signals strong institutional confidence in India’s rapid delivery sector and perhaps CalPERS’ growing appetite for direct venture investments in emerging markets, too. Notably, CalPERS is also an investor in funds of Zepto’s existing backers, like Lightspeed and General Catalyst.
