India’s quick-commerce trailblazer Zepto has raised $450 million in a fresh funding round led by the California Public Employees’ Retirement System (CalPERS), one of the world’s largest pension funds. This round pushes Zepto’s valuation to a staggering $7 billion, marking one of the fastest valuation jumps in India’s startup history.
The round also saw participation from StepStone Group, Nexus Venture Partners, Glade Brook Capital, and Goodwater Capital, all of whom doubled down on Zepto’s growth trajectory. The investment reinforces global confidence in India’s rapidly expanding 10-minute delivery sector, which continues to evolve beyond groceries into a full-fledged convenience ecosystem.
Zepto’s Meteoric Rise in India’s Quick Commerce Race
Founded in 2021 by Aadit Palicha and Kaivalya Vohra, two Stanford dropouts, Zepto began as a bold experiment — to deliver groceries in 10 minutes or less. The idea seemed audacious during India’s post-pandemic phase, but the founders saw an opportunity: Indian consumers had grown accustomed to speed, reliability, and instant gratification.
Zepto built an ultra-efficient model using dark stores — small, strategically placed micro-warehouses in urban areas — to fulfill orders quickly. The company currently operates over 350 dark stores across 12 major cities, including Mumbai, Delhi, Bengaluru, Chennai, and Hyderabad.
In just four years, Zepto has evolved from a grocery app into a quick-commerce powerhouse, delivering everything from snacks and beverages to home essentials, electronics, and even flowers.
CEO Aadit Palicha called the new funding “a decisive leap toward long-term sustainability.”
“We built Zepto with discipline and speed. We now operate profitably in several cities. This round strengthens our ability to expand nationwide while keeping our operations efficient and customer-centric,” Palicha said.
The CalPERS Bet: Long-Term Confidence in Indian Consumption
CalPERS’ investment in Zepto marks a rare and strategic move for the US-based pension giant, which manages over $500 billion in assets. It rarely invests directly in emerging-market startups, but Zepto’s operational metrics and market leadership convinced CalPERS to step in.
Jason Lee, senior investment director at CalPERS, highlighted the rationale behind the move:
“Zepto represents a generation of Indian companies redefining urban convenience. Its focus on unit economics, supply chain discipline, and speed aligns with our philosophy of backing scalable, sustainable growth.”
This vote of confidence from a global institutional investor strengthens Zepto’s credibility in global capital markets, potentially paving the way for a public listing within the next 24 months.
Financial Discipline Meets Growth Ambition
Unlike many of its rivals that burned cash chasing scale, Zepto maintained a sharp focus on profitability and operational efficiency.
By early 2025, the company achieved EBITDA-level profitability in Mumbai and Bengaluru, its two largest markets. Across India, Zepto now records an average order value (AOV) of ₹580 and fulfills over 600,000 orders daily.
COO Kaivalya Vohra said the company achieved this by optimizing dark store inventory and reducing delivery costs through data-driven route planning.
“We run every store with precision. Each SKU, each route, and each delivery timing undergoes optimization through our in-house AI systems. Efficiency drives everything we do,” he said.
This approach keeps fulfillment times consistently under 9 minutes, setting a global benchmark.
AI and Automation at Zepto’s Core
Zepto now plans to invest heavily in AI and warehouse automation. The new funding will help scale its proprietary Zepto Intelligence System (ZIS), a predictive algorithm that manages demand forecasting, delivery routing, and inventory planning.
The platform tracks over 5 million data points daily, helping Zepto maintain a 97% on-time delivery rate while reducing wastage by 40%.
The company’s engineering team in Bengaluru and Hyderabad continues to design automated picking systems that use robotics and smart conveyors in select dark stores.
CTO Rohit Krishnan explained how the system transforms operations:
“ZIS predicts not just what customers will order, but when. It prepares stock accordingly. Our dark stores behave like intelligent micro-factories.”
This technological edge has allowed Zepto to outperform traditional grocery delivery platforms like BigBasket and Blinkit, which rely more on manual logistics.
Customer Loyalty and Brand Positioning
Zepto’s rapid growth also stems from its sharp brand positioning. Its tagline — “Instant. Reliable. Yours.” — resonates with India’s urban millennials and Gen Z consumers who value time and convenience.
The company’s Zepto Pass subscription program, launched in 2024, already has over 2 million active users. The plan offers unlimited free deliveries, early access to new products, and exclusive discounts.
Zepto also continues to refine customer engagement through gamified loyalty programs and AI chat support, which resolves 90% of complaints instantly.
“Our customer retention rate now exceeds 75%. We don’t just deliver fast; we deliver trust,” said CMO Pooja Sharma.
Diversifying Beyond Groceries
Zepto no longer identifies itself purely as a grocery delivery app. The startup has gradually transformed into a “convenience super app.”
Users can now order medicines, pet supplies, electronics accessories, and even breakfast combos from neighborhood cafes. The company recently launched Zepto Café, which partners with local bakeries and restaurants to deliver hot food under 20 minutes.
Zepto also introduced Zepto Essentials, its private-label brand offering household and personal care items. These products contribute nearly 12% of monthly revenue and carry higher profit margins.
“Our goal is to own the 10-minute convenience space, not just groceries,” said Palicha. “Whether you need a phone charger, toothpaste, or breakfast, Zepto delivers it instantly.”
Competitive Landscape: A Tight Race with Blinkit and Swiggy Instamart
Zepto competes fiercely with Blinkit (owned by Zomato) and Swiggy Instamart, both of which continue to expand aggressively. However, Zepto’s asset-light expansion model gives it an edge.
Instead of buying real estate, Zepto leases underutilized retail spaces and turns them into micro-warehouses. This flexibility allows faster rollouts with lower capital expenditure.
Industry experts predict that Zepto’s focus on operational profitability will soon make it the first quick-commerce unicorn to file for an IPO.
“Zepto’s speed of execution matches its delivery promise,” said Anand Lunia, General Partner at India Quotient, one of Zepto’s early backers. “It mastered a market that others treated as unsustainable.”
Sustainability and Workforce Empowerment
Zepto’s expansion also includes a strong sustainability agenda. The company plans to electrify 80% of its delivery fleet by 2026. It already operates over 7,000 electric vehicles across major metros and uses solar-powered hubs for dark stores.
Each delivery partner earns performance-linked incentives and enjoys access to health insurance and skill development programs.
“Our delivery partners power this mission. We owe them safety, dignity, and growth,” said COO Vohra.
Future Roadmap: IPO, International Markets, and Profitability
With its balance sheet strengthened by $450 million in new capital, Zepto now eyes profitable growth and international expansion.
The company plans to enter Dubai and Singapore by 2026, markets with dense populations and high smartphone penetration. It also expects to cross $1.5 billion in annualized revenue by the end of FY2026.
According to internal sources, Zepto has already started preparing for an IPO in late 2026 or early 2027, with Goldman Sachs and Morgan Stanley in early talks as potential lead bankers.
“We built a business that thrives on execution, not hype. Our next chapter focuses on sustainable profitability and global reach,” said Palicha.
Conclusion: Zepto Defines the Future of Instant Commerce
Zepto’s $450 million funding round underscores a defining moment for India’s startup ecosystem. The company’s rise from a college project to a $7 billion powerhouse mirrors India’s entrepreneurial confidence and digital transformation.
By fusing AI, efficiency, and speed, Zepto has turned instant delivery into a mainstream lifestyle choice.
As global investors pour billions into India’s consumer internet economy, Zepto stands at the center of a revolution — one that delivers not just groceries or goods, but a glimpse into the future of urban living: fast, intelligent, and relentlessly innovative.
Also Read – India’s AI Chatbots Are Replacing Call-Center Workers