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BENGALURU : Kiranakart Technologies Pvt. Ltd, which runs 10-minute grocery delivery platform Zepto, has raised $200 million in a Series D funding round led by American technology startup accelerator Y Combinator’s Continuity Fund, which valued it at $900 million.  

The round also saw the participation of new investor Kaiser Permanente, besides existing investors Nexus Venture Partners, Glade Brook Capital and Lachy Groom.

"Rather than optimising for a 10-15% higher valuation, we wanted to optimise for the right long-term partner, like Y Combinator. More importantly, we wanted to have enough cash in the bank where we are not affected by market sentiment cycles. it was not a tough round given Zepto’s focus on solid execution and reaching a high level of scale sustainably," said Aadit Palicha, Zepto co-founder and chief executive.

Zepto claims to have posted 800% quarter-on-quarter growth in revenue , while reducing its burn rate 5X on a per-order basis.“We maintained a phenomenal 88-point NPS (net promoter score) and 60% month-1 buyer retention at scale."

Palicha said it was easy to raise funds given its focus on execution achieving the highest scale of business among competitors.

The fresh capital will be deployed for growing ‘sustainably’ across India, as it looks to hire across engineering, analytics, operations, marketing, finance, and human resource divisions.  

Zepto has over 50,000 delivery partners and around 1,000 employees. It plans to double its employee base in the next one year. 

“Our rigorous focus on unit economics is the main reason why we’ve had such an amazing trajectory as a company. We have turned micro-markets profitable and brought down burn significantly while growing to a scale of hundreds of thousands of orders per day," said Kaivalya Vohra, co-founder and chief technology officer, Zepto.

"By the end of the quarter, we look to turn at least a dozen micro-markets profitable. We are already operating profitable in a few mature micro markets and our burn per order has reduced significantly. We have also focused on Unit Economics driven growth and we’re now at a high-level of scale compared to other players in Q-Commerce."

In January, Zepto had raised $100 million (around 758 crore) in a Series C round led by Continuity Fund at a valuation of $570 million (around 4,275 crore). In November, it had raised $60 million. So far, the company has raised $360 million.

Palicha said Zepto wants to continue its focus on a high degree of efficiency rather than valuation and may raise the next round in a year.

Zepto is also piloting a service to deliver coffee, tea, and other café items within 10 minutes in select areas of Mumbai under Zepto Café. He said early customers responded positively to its service. Zepto plans to scale it across India if the pilot goes well, the company said. 

Zepto was founded by Palicha and Vohra, 18-year-old dropouts of computer science degree course at Stanford University. The company operates a network of cloud stores or micro-warehouses to deliver groceries in under 10 minutes. It is present in all major Indian cities.

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