Indian rapid delivery startup Zepto announced it has secured $400 million in a funding round led by a new backer, the California Public Employees’ Retirement System (CalPERS), a U.S. pension fund. This round, which combines both primary and secondary investments, also saw participation from existing investors such as Avenir, Avra, Lightspeed, Glade Brook, The Stepstone Group, and Nexus Venture Partners. Following this investment, Zepto intends to pursue a public listing next year.
Zepto is in competition with other instant delivery services like BlinkIt (formerly Zomato’s Eternal), Swiggy Instamart, and Tata’s BigBasket, all of which are part of publicly traded companies. The startup has been actively raising capital, having secured $1.3 billion over several months last year. Since Zepto’s previous funding in November 2024, Swiggy has gone public on India’s stock market, and Blinkit has overtaken Zomato in terms of gross order value for the first quarter of 2025.
The company is also up against established e-commerce giants like Flipkart and Amazon, both of which have launched their own rapid delivery services.
Startups are increasingly exploring specialized e-commerce models. Swish and Zing, backed by Accel, are active in the food delivery sector; public company Nykaa, Flipkart’s Myntra, Silkk, and Blip are aiming to deliver clothing within an hour; Snabbit, supported by Lightspeed, enables users to book home services such as cleaning in just 10 minutes; and companies like FirstClub are focusing on curated grocery delivery.
Zepto and its CEO Aadit Palicha remain optimistic about the company’s trajectory. Palicha shared that Zepto has grown from handling 500,000 daily orders five quarters ago to 1.7 million now, and he expects this upward trend to persist.
“The main metric for this funding round was our success in making dark stores profitable while bringing in over 10 million new monthly transacting users. We did increase our spending on customer acquisition and opening new stores, but even with these investments, we managed to keep our stores profitable,” Palicha told TechCrunch.
BlinkIt, Instamart, and Zepto all operate in these segments, with food delivery being especially prominent. However, Zepto had to temporarily suspend its Zepto Cafe service in 44 cities due to staffing issues. While the company did not disclose how many cities have resumed the service, it stated that Zepto Cafe is now a business with an annualized run rate exceeding $110 million and is expanding quickly.
The outlook for the quick commerce sector in India is positive. Morgan Stanley forecasts the market could reach $42 billion by 2030, while Bernstein projected in March that it could hit $100 billion within ten years. Bernstein also observed that in key markets, quick commerce has become the main way people purchase groceries.
Zepto has primarily focused on expanding its services in India’s largest cities. According to J.P. Morgan, BlinkIt operates a network of dark stores in over 204 cities, Swiggy Instamart in more than 104, and Zepto in upwards of 80 cities. Zepto currently has more than 1,000 stores and aims to open several hundred more in the coming year.
The company mentioned that while most of its business comes from metropolitan areas, nearly 20% of its total order volume now comes from smaller cities.
On its app, Zepto has emphasized features like Super Saver, which offers extra discounts on bulk grocery purchases, and has highlighted categories such as electronics, fashion, and home decor. However, this has led to a cluttered user interface. Palicha acknowledged this issue and said the company will update the app’s design to make it more user-friendly in the near future.
This investment is significant for CalPERS, as the pension fund usually invests in venture capital through intermediaries rather than leading direct rounds in startups. Since 2022, CalPERS has been actively increasing its venture capital exposure after what it described as a “lost decade” of underperformance, growing its venture allocation from about $800 million to a target of $5 billion. By leading this round in an Indian quick commerce firm, CalPERS appears to be signaling strong institutional faith in India’s fast delivery market and possibly a greater interest in direct venture investments in emerging economies. It’s also worth noting that CalPERS invests in funds managed by Zepto’s existing backers, such as Lightspeed and General Catalyst.
