Quick-Commerce Battle Heats Up: Zepto Raises $450M, Eyes Profitability Through Ads And Private Labels
The fundraise will push Zepto’s total cash reserves to $1 billion, building a sizeable war chest as competition in the quick-commerce segment intensifies.
Quick-commerce player Zepto is set to raise $450 million in a fresh funding round that values the firm at $7 billion, media reports said. The latest round, a mix of primary and secondary share sales, is being led by US pension fund Calpers, with participation from existing investors General Catalyst, Avra, Lightspeed, StepStone, and Nexus Venture Partners.
The fundraise will push Zepto’s total cash reserves to $1 billion, building a sizeable war chest as competition in the quick-commerce segment intensifies. So far, the company has raised $2 billion at a valuation of $5 billion, including $1.35 billion last year, Business Standard reported.
Expenditure Under Control
Citing sources, the report noted that Zepto has significantly reduced its cash burn, enabling it to maintain a $1 billion cash balance. “Zepto was burning around 180 crore every quarter. However, since May this has been brought down to double digits. One reason for this has been the new revenue layers the company has built,” it added.
The company has also added fresh revenue streams, including advertising as well as private labels, which have supported the shift towards profitability. In April, cofounder and chief executive Aadit Palicha revealed that the advertising vertical had reached an annual revenue run rate of $200 million, up sharply from $40 million a year earlier, in an interview with Y Combinator’s Garry Tan.
Advertising And Private Labels Drive Growth
“Verticals like advertisement, which have turned profitable, have helped the firm to reduce its cash burn. Add to this the fact that several marketing campaigns on its platform are co-funded with the brands,” the report further added.
These additional revenue streams, combined with tighter spending, have allowed Zepto to rein in its losses while scaling operations.
Competitors Build Their Own Cash Buffers
The decision to shore up a $1 billion war chest comes as Zepto’s rivals sit on large reserves and aggressively expand their networks of dark stores. Blinkit’s parent company Eternal reported cash reserves of $3.3 billion as of March 31, 2025, while Swiggy holds $1.1 billion.
At the same time, Tata Sons is reportedly looking to raise about $1.3 billion for its digital platforms BigBasket and Tata 1mg, further heightening competition in the sector.
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