Zepto in talks to raise $100-150 mn from domestic investors ahead of IPO

Quick commerce firm has raised over $1.2 billion in funding in the last 14 months

Zepto is in talks to raise $100-150 million in fresh funding from Indian family offices and high net-worth individuals (HNIs) as the quick commerce major looks to bring in more domestic investors to its cap table ahead of the upcoming initial public offering (IPO), according to sources.

In the last 14 months, Zepto has raised over $1.2 billion in funding to strengthen its balance sheet for its stock market debut expected next year.

“The reasoning (for the new round) is that they want to increase domestic ownership and want more homegrown investors on board ahead of the IPO,” said a person familiar with the matter.  

Motilal Oswal’s private investment arm is likely to lead the round and invest as much as $40 million in the quick commerce firm. The company will raise another $60-100 million from other domestic HNIs and family offices, sources said.

Earlier this year, chairman and co-founder of Motilal Oswal Group Raamdeo Agrawal reportedly picked up a stake in Zepto in his personal capacity and would be looking to increase his stake in the new round.

Zepto’s post-money valuation at $5 billion will remain unchanged from its previous funding round.

Zepto raised $340 million in August in a follow-on financing round at a $5 billion valuation. This came two months after the firm raised a massive $665 million in a series F round, where it was valued at $3.6 billion.

The firm currently has large foreign investors like General Catalyst, Dragon Fund, StepStone, Lightspeed Ventures, Nexus Venture Partners, and Glade Brook Capital, among others, on its cap table.

Zepto, which is the only firm to exclusively focus on quick commerce, competes with the likes of Zomato-owned Blinkit, Swiggy Instamart, and Tata-owned Big Basket.

The firm currently operates around 350 dark stores across the top ten cities in India and plans to expand into another ten cities and increase its store count to 700.

The Mumbai-based firm has steadily increased its market share in the quick commerce space. While Blinkit remains the market leader with a 40 per cent share, Zepto's market share has risen from 15 per cent in March 2022, to 22 per cent in January 2024, according to a recent report by HSBC Global.

Meanwhile, Instamart's share has fallen from 52 per cent in March 2022 to 32 per cent in January 2024, the report said.