Zepto is in discussions to secure $100-150 million in new funding from Indian family offices and high-net-worth individuals (HNIs) as it prepares for its upcoming initial public offering (IPO). The quick commerce leader aims to increase domestic investor participation in its capital structure ahead of the IPO, which is expected next year.
Recent Funding Success
In the past 14 months, Zepto has raised over $1.2 billion to strengthen its balance sheet for its market debut. Sources indicate that the new funding round aims to boost domestic ownership among investors. Motilal Oswal’s private investment arm is likely to lead this round, contributing up to $40 million, with additional funds raised from other domestic investors.
Valuation and Investor Landscape
Zepto’s post-money valuation remains at $5 billion, unchanged from its previous funding round. Earlier in August, the company raised $340 million at the same valuation, following a significant $665 million round two months prior.
Rapid Expansion in Quick Commerce
As a pioneer in quick commerce, Zepto competes with major players like Blinkit, Swiggy Instamart, and BigBasket. The company operates around 350 dark stores across India’s top ten cities and plans to expand into ten more cities, aiming to increase its store count to 700.
Founders’ Background
Founded in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto aims to revolutionize grocery delivery with a focus on ultra-fast service. The duo, both Stanford dropouts, launched the platform during the pandemic to meet the growing demand for quick grocery delivery.
The Journey So Far
Zepto started as Kiranakart and quickly transitioned to its current model, raising $730,000 in its first round and reaching a valuation of $570 million by the end of 2021. Key investors include Glade Brook Capital, Nexus Venture Partners, and Y Combinator.
Efficient Delivery Model
Zepto’s unique model relies on dark stores, enabling it to deliver groceries in under ten minutes. The company employs advanced technology for real-time demand sensing and efficient last-mile delivery.
Future Outlook
With its sights set on a public listing in early 2025, Zepto is focused on achieving profitability and reducing operational costs. The company has already made strides toward becoming EBITDA-positive, with around 150 dark stores reportedly achieving this milestone.
By strategically enhancing its leadership team and optimizing operations, Zepto is positioning itself for a successful IPO and continued growth in the quick commerce market.
