Zepto, a delivery startup, has selected Axis Capital, Goldman Sachs, and Morgan Stanley as advisors for its upcoming IPO, which is expected to take place in the financial year 2025, according to a report from Moneycontrol.
Neither Zepto nor the three financial firms responded to queries regarding this development. Livemint could not independently confirm this information.
What We Know So Far
The IPO is reportedly planned for around August 2025, in the second half of the fiscal year. Zepto is looking to raise $450-500 million through the listing, although details about the offer for sale (OFS) are still unclear, according to sources cited by Moneycontrol.
The valuation of the company ahead of the IPO is still being determined, but Zepto was last valued at $5 billion in August 2023, after securing $340 million in funding.
Additionally, Zepto will need to move its base from Singapore back to India in order to list domestically. CEO Aadit Palicha has mentioned in interviews that this process will be completed soon.
Recent Funding and Valuation
In August 2023, Zepto raised $340 million in additional funding led by US-based venture capital firm General Catalyst. This followed a $665 million pre-IPO funding round earlier in the year, bringing the company’s valuation to $5 billion.
New investors, including Dragon Fund and Epiq Capital, joined this funding round, while existing investors such as StepStone, Lightspeed, DST, and Contrary increased their stakes in the company.
Zepto became a unicorn a year ago, reaching a $1.4 billion valuation after raising $200 million.
India’s Quick Commerce Market
Zepto was founded in April 2021 by Palicha and Kaivalya Vohra, during the COVID-19 lockdowns, when many people in India’s major cities turned to online shopping for daily necessities.
India’s quick-commerce market grew by 77% in 2023, reaching a gross merchandise value (GMV) of $2.8 billion. This represents 5% of the overall e-commerce market in the country, according to a report by consulting firm Redseer.
However, analysts believe the quick-commerce market is largely limited to metro cities, and growth may slow down in the next few years. Karan Taurani, an analyst at Elara Capital, warned that competition in the quick-commerce sector will require companies to have ample funding to expand into non-metro areas and develop better technology.
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