Zepto, the Indian online grocery platform, has seen a remarkable 40% increase in valuation, now standing at a whopping $5 billion. This surge comes after a successful funding round led by General Catalyst Partners, highlighting the growing interest of foreign investors in India’s bustling e-commerce landscape.

New investors Dragon Fund and Epiq Capital joined the $340 million funding round, as stated by Zepto in a recent announcement. Existing supporters such as Lightspeed Venture Partners and DST Global also ramped up their investments in the company.

Based in Mumbai, Zepto’s previous funding round in June raised $665 million from investors like Avenir and Lightspeed, valuing the company at $3.6 billion.

While e-commerce in India faces challenges like Paytm’s regulatory issues and Byju’s insolvency proceedings, Zepto is thriving amidst a growing middle class. Google’s $350 million investment in Flipkart earlier this year shows the potential of India’s market.

Zepto’s ambitious plans include expanding its warehouses to over 700 by March 2025, fueled by the reinvestment of sales from mature dark stores. The company is also eyeing a public offering in the near future.

Founded by childhood friends Aadit Palicha and Kaivalya Vohra, who abandoned Stanford’s computer science program to pursue their dream in 2021, Zepto faces fierce competition in India’s grocery delivery space. Key rivals include Amazon India, Swiggy, Zomato, and BigBasket.