Zepto raises $450 million from CalPERS at $7 billion valuation; Palicha 'hoping to file IPO soon'

Quick-commerce startup Zepto said on Thursday it has raised $450 million in a funding round led by the California Public Employees' Retirement System (CalPERS), valuing the company at $7 billion as it prepares for a planned initial public offering.

The fresh capital comes nearly a year after the Mumbai-based firm’s previous $350 million round in November 2024, which pegged its valuation at $5 billion.

The latest raise, largely a primary infusion, is being treated as a “pre-IPO” round, Chief Executive and Co-Founder Aadit Palicha told PTI.

“We’ve closed nearly $450 million, and most of that is primary. The valuation of the company was $7 billion by the time it closed. A couple of investors participated, but the largest cheque individually came from CalPERS…We are considering it a pre-IPO round, and we are hoping to file our IPO soon,” Palicha said.

US-based venture capital firm General Catalyst co-led the round, while existing backers including Avenir, Glade Brook Capital, Lightspeed Venture Partners and StepStone Group also participated.

Zepto received a primary infusion of around $300 million, while also expanding its employee stock ownership plan (ESOP) pool by roughly $170 million, taking its total pool to more than $500 million, reported The Economic Times, citing documents sourced from the Registrar of Companies.

Following the latest round, Zepto now has around $900 million in cash reserves, which it plans to use to strengthen its balance sheet, expand operations moderately, and continue improving profitability.

“We now have approximately USD 900 million of net cash in the bank and are more than well-capitalised for the future,” Palicha said.

The startup, founded in 2021 by Stanford dropouts Palicha and Kaivalya Vohra, operates a network of dark stores that promise grocery deliveries in minutes across major Indian cities.

Palicha said Zepto currently handles around 1.7 million orders a day, with a majority of its stores now profitable.

Domestic ownership in Zepto is also expected to rise to 40% in the coming weeks, up from about 12% currently, Palicha added.

The company plans to file its draft red herring prospectus (DRHP) over the next few quarters.

While there is no fixed allocation for the new funds, a portion will be used to open a few hundred more stores over the next 12 months.

“We saw an opportunity to strengthen our balance sheet in a relatively less painful manner, so we decided to close this funding round before filing,” ET quoted Palicha as saying.

Zepto competes with Zomato-owned Blinkit, Swiggy’s Instamart, and Tata-backed BigBasket’s BB Now in India’s fast-growing quick-commerce market.