The StepStone Group, which provides funding ranging from $1 million to $150 million, supports venture capital (VC) firms, invests directly in companies, and participates in secondary transactions when investors seek to exit. Recently, Zepto secured $200 million at a $1.4 billion valuation, marking StepStone’s first direct investment in India and ending an 11-month unicorn dry spell.
Ashton Newhall, a partner at the US asset management firm, expressed StepStone’s enthusiasm for India’s third-largest startup ecosystem. The StepStone Group, overseeing assets exceeding $140 billion, has historically invested indirectly as a fund sponsor. They back notable VC firms such as Nexus Venture Partners and Lightspeed, often partnering with limited partners like Lachy Groom, some of whom also support Zepto.
In India, StepStone focuses on e-commerce, software-as-a-service (SaaS), and artificial intelligence startups. Despite challenges faced by startups like Dunzo and global examples such as Instacart, which encountered valuation drops, StepStone remains optimistic about supporting quick-commerce entities like Zepto.
Newhall emphasized the unique blend of factors contributing to India’s favorable venture outcomes, including skilled founders and relevant financial capital. While acknowledging governance issues plaguing Indian startups, StepStone aims to partner with the right people who can deliver exceptional results.
Zepto, led by young founders Aadit Palicha and Kaivalya Vohra, has reshaped its leadership to pursue EBITDA-level profitability within a year and plans an IPO in 2025. The StepStone Group values Zepto’s distinct model and is confident in the capabilities of its management team, despite challenges the startup landscape may pose.
