India’s startup ecosystem is experiencing a moment of celebration as Zepto, a quick commerce startup, becomes the first unicorn of 2023. The company recently secured a Series E funding round of $200 million, valuing it at $1.4 billion. Led by StepStone Group, the funding will enable Zepto to expand its presence in major cities across India, including Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Pune, and parts of Kolkata.
With this achievement, Zepto aims to achieve EBITDA-level profitability within the next 12-15 months, focusing on both growth and profitability simultaneously. The hyperlocal grocery delivery startup plans to expand its Zepto Cafe offering to major cities like Delhi-NCR, Bengaluru, and Hyderabad by June 2024. The current bear market conditions have compelled the team to make disciplined decisions and maximize operating leverage.
In another development, Swiggy, the popular food and grocery delivery company, has restarted its plans for an initial public offering (IPO). After pausing its IPO plans earlier this year due to market sentiment, Swiggy has engaged in talks with investment banks such as Morgan Stanley, JP Morgan, and Bank of America. The company aims to list itself on Indian bourses between July and September 2024.
With a valuation of $10.7 billion in its last funding round, Swiggy is considering this benchmark for its IPO planning. However, the final decision regarding the potential stake sale and final valuation is yet to be made.
1. What is a unicorn?
A unicorn is a privately held startup company valued at over $1 billion.
2. What is quick commerce?
Quick commerce refers to the delivery of essential goods and services in a short time frame, usually within an hour.
3. What is EBITDA-level profitability?
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a financial metric that measures a company’s operational profitability. Achieving EBITDA-level profitability means generating sufficient revenue to cover operating expenses without factoring in interest, taxes, depreciation, and amortization.
4. What is an initial public offering (IPO)?
An initial public offering (IPO) is the process by which a private company offers its shares to the public for the first time, thereby becoming a publicly traded company.
5. How does the valuation of a company impact its IPO planning?
The valuation of a company plays a crucial role in determining the stake sale and final pricing of shares during an IPO. It helps in assessing market demand and investor perception, which ultimately influences the success of the IPO.