Indian quick commerce startup nears unicorn status with $200m round

India’s quick commerce market is estimated to grow 15x by 2025 to hit a market size of nearly US$5.5 billion – large enough to propel prominent investors’ interest and gain the early-mover advantage.

One of the companies at the helm of this nascent yet flourishing industry is Zepto, a startup launched by two Stanford University dropouts, Aadit Palicha and Kaivalya Vohra.

Zepto founders Kaivalya Vohra (left) and Aadit Palicha / Photo credit: Zepto

The Y Combinator-backed startup promises 10-minute grocery deliveries, outpacing the delivery speeds of several ecommerce companies. The concept of near-instant delivery, which is also seeing adoption in industries like food, has sparked wide discussion on aspects ranging from the well-being of riders to questions on its purpose altogether.

These concerns, however, do not seem to deter Zepto’s fundraising efforts. The startup has now raised US$200 million in a series D funding round at a valuation of US$900 million, just US$100 million shy of acquiring unicorn status.

The latest investment is nearly double what it raised in its series C round. To date, the company has raised nearly US$360 million.

Earning investors’ trust

Y Combinator Continuity – the global investor’s fund dedicated to supporting founders as they scale their companies – doubled down and led Zepto’s series D round, which also saw the onboarding of a new investor, Kaiser Permanente.

All key existing investors, including Nexus Venture Partners, Glade Brook Capital, and Lachy Groom, also increased their investments, Zepto said in a statement.

Palicha believes that the quick commerce firm has been successful in raising large sums and getting new investors on board in such a short span because the company is building its business more efficiently than anyone else.

See also: Will India’s 10-minute quick commerce model last?

Zepto has grown 800% quarter on quarter in terms of revenue while maintaining a relatively low cash burn rate, he told Tech in Asia.

“When you look at the businesses that are growing this heavily, you will see them burning US$35 million to US$40 million a month. We are much lower than that,” he added.

The cash burn has come down 5x on a per-order basis, Palicha said in a statement.