Zepto Secures $300 Million in Secondary Share Sales Ahead of IPO, Taps Domestic Mutual Funds
Zepto: Quick commerce unicorn Zepto is making significant strides toward its initial public offering (IPO) by securing $300 million (approximately ₹2,600 crore) in secondary share sales. The company has been in discussions with top domestic mutual fund houses to facilitate this deal, marking a key milestone in its journey toward a public market debut later this year.
Strategic Investor Outreach
According to industry insiders, Zepto’s CEO Aadit Palicha has held meetings with executives from SBI Mutual Fund, Axis Mutual Fund, ICICI Prudential Mutual Fund, and other major players to introduce them to the company’s pre-IPO secondary share sale round.
During these discussions, Palicha reportedly assured investors that Zepto is on track to achieve EBITDA breakeven by Q4FY26, reinforcing the company’s commitment to financial sustainability.
A Fully Secondary Share Sale
A notable aspect of this pre-IPO fundraising is that the entire $300 million will come from secondary share sales, meaning no fresh capital will be injected into the company. Instead, existing foreign investors and angel investors will exit by offloading their shares, making way for more Indian institutional investors.
Some of the foreign investors expected to fully exit include early backers like Oleg Wladimir Nicolas Tscheltzoff, Jacob Yedidya Honig, and Jonathan Saint, among others.
This move aligns with Zepto’s broader strategy to increase domestic ownership, a trend that began in November 2024, when the company raised $350 million from Indian investors like Motilal Oswal and Ranjan Pai’s Claypond Capital.
IPO Timeline and Regulatory Considerations
While Zepto is gearing up for its IPO, the actual secondary share sales will only be finalized by October 2025. The company is expected to file its draft red herring prospectus (DRHP) within the next two months. However, due to SEBI regulations, financial disclosures to potential investors will be limited during this period.
Zepto recently moved its headquarters back to India from Singapore, further strengthening its position as a domestic market leader in the quick commerce space.
Zepto’s Fundraising Spree and Competitive Landscape
The company has been aggressively raising funds, amassing $1.35 billion in just five months through multiple funding rounds:
- June 2024: Raised $665 million from Glade Brook Capital, The StepStone Group, Nexus Venture Partners, and others.
- August 2024: Secured $340 million from General Catalyst and other investors.
- November 2024: Raised $350 million from Motilal Oswal, Ranjan Pai’s Claypond Capital, and other Indian investors.
Currently, Zepto holds over $1 billion in cash reserves, a strategic move to sustain its operations in the highly competitive quick commerce sector.
The company faces stiff competition from Zomato’s Blinkit, Swiggy Instamart, Flipkart Minutes, Tata BigBasket, and other well-funded players in a market that is expected to grow from $6 billion today to $25-30 billion in the coming years.
Key Financial Metrics and Ratios
Zepto’s rapid growth has been accompanied by strong financial indicators. Although exact IPO details remain undisclosed, here are some critical financial metrics that investors might consider:
- Revenue Growth: Estimated 2.5x increase YoY, reflecting the rising demand for quick commerce.
- Gross Profit Margin: Expected to improve as the company nears breakeven in Q4FY26.
- EBITDA Margin: Projected to turn positive within the next two years.
- Cash Burn Rate: Moderated due to strong capital reserves.
- Market Valuation: Expected to surpass $4-5 billion post-IPO.
Conclusion
Zepto’s $300 million secondary share sale represents a pivotal moment for the company as it inches closer to its highly anticipated IPO. By prioritizing domestic investors, maintaining a strong cash balance, and strategically expanding in a booming quick commerce market, Zepto is positioning itself for long-term success.
With the industry projected to quadruple in size over the next few years, Zepto’s IPO will be closely watched as a key event in India’s startup ecosystem.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.