Zepto, a 10-minute grocery delivery app, raises $200 million at $900 million valuation

Instant grocery startup Zepto has raised $200 million in a new financing round as it looks to expand its 10-minute delivery service to more cities in India and grow its network of dark stores.

Existing backer Y Combinator Continuity led Zepto’s Series D round, valuing the Mumbai-headquartered startup at about $900 million, up from $570 million in its December Series C round and $225 million in a round unveiled in late October.

Kaiser Permanente, the giant healthcare firm, which also operates a venture arm, as well as all key existing investors including Nexus Venture Partners, Glade Brook Capital, Contrary Capital and Lachy Groom, participated in the new round, the startup said Monday evening.

There’s no secondary transaction in the new round, which brings the startup’s to-date raise to $360 million.

At 19, Aadit Palicha and Kaivalya Vohra co-founded Zepto. The duo, who had previously worked on a number of projects, including a ride-hailing commute app for school kids, and dropped out of Stanford two years ago, took Zepto out of stealth mode in November last year.

Its 10-minute delivery service is today operational in 11 cities across India and it processes hundreds of thousands of orders each day, Palicha, who serves as Zepto’s chief executive, told TechCrunch in an interview.

The startup’s current annualized revenue is between $200 million to $400 million, he said, a figure he is determined to grow to “at least $1 billion” by the quarter ending March next year.