In a bid to shore up its financial position ahead of its much-anticipated initial public offering (IPO), quick-commerce unicorn Zepto is set to raise $300 million (approximately INR 2,600 crore) in a pre-IPO secondary share sale. The company, which is preparing for its public market debut later this year, has engaged with several leading mutual fund houses in India to facilitate this share sale, sources confirmed to Moneycontrol. The move is part of Zepto’s broader strategy to tap domestic capital and solidify its position in the competitive quick-commerce industry, as it moves closer to the public markets.
Zepto’s Approach to Boosting Domestic Shareholding
The Bengaluru-based Zepto has been in active discussions with top mutual fund houses, including SBI Mutual Fund, Axis Mutual Fund, and ICICI Prudential Mutual Fund, to facilitate the sale of secondary shares worth $300 million. The key objective is to allow more Indian investors to hold a stake in the company ahead of its IPO, as it moves away from its reliance on foreign investors and shifts to a more domestically concentrated ownership structure.
A person familiar with the matter told Moneycontrol that during recent meetings with these mutual fund executives, Zepto’s CEO Aadit Palicha outlined the company’s roadmap to profitability, promising that Zepto would break even on an EBITDA (earnings before interest, taxes, depreciation, and amortisation) basis by the fourth quarter of fiscal year 2026 (Q4FY26). This clear path to profitability has been touted as a significant factor that will boost investor confidence, especially in light of the substantial $300 million secondary share sale.
Strategic Shift Towards Indian Investors
Zepto’s decision to increase its domestic shareholder base and reduce its dependency on foreign capital is not new. In November 2024, the company raised $350 million from prominent Indian investors, including Motilal Oswal and Ranjan Pai’s Claypond Capital. This move marked Zepto’s increasing efforts to diversify its funding sources and limit the influence of foreign capital in the company’s future.
With the pre-IPO round, Zepto is expected to provide liquidity to foreign investors by enabling them to offload their shares. Key foreign shareholders, including angel investors such as Oleg Wladimir Nicolas Tscheltzoff, Jacob Yedidya Honig, and Jonathan Saint, will reportedly fully exit, making way for more Indian investors to take a stake in the company.
According to a second source close to the matter, this transaction is crucial to Zepto’s long-term vision of becoming predominantly owned by Indian investors, aligning with the company’s broader strategy of bringing more capital into the domestic market. The strategy is clear: boost domestic shareholding and bring liquidity to foreign investors gradually.
The $300 million round is expected to close by October 2025, just ahead of Zepto’s IPO filing, which is anticipated to take place within the next two months. At this stage, no primary capital will be raised, meaning the funds will come solely from secondary sales.
A Look Back at Zepto’s Fundraising Journey
Zepto’s impressive fundraising spree in recent months has attracted considerable attention. The company has already raised an astounding $1.35 billion in a span of just five months, underscoring the immense confidence investors have in the company’s future growth potential.
- In June 2024, Zepto raised $665 million from major investors such as Glade Brook Capital, The StepStone Group, and Nexus Venture Partners.
- Just two months later, the company closed another funding round of $340 million from General Catalyst, continuing its momentum.
- The most recent funding round in November 2024 saw Zepto secure $350 million from Motilal Oswal, Claypond Capital, and other domestic players, helping the company reduce its reliance on foreign investors.
This rapid influx of capital has bolstered Zepto’s cash reserves, which currently exceed $1 billion, a substantial buffer that is intended to support its expansion plans in the highly competitive quick-commerce market.
The Competitive Landscape of Quick Commerce
The quick-commerce space in India has become one of the hottest sectors in the startup ecosystem, and Zepto is right at the heart of this battle. Competing with larger players like Zomato’s Blinkit, Flipkart’s Minutes, Swiggy’s Instamart, and Tata’s BigBasket, Zepto operates in a highly competitive environment, where market share is often a function of massive investments.
The quick-commerce market, despite being relatively new, is already a $6 billion industry and is projected to grow to $25–30 billion over the next few years. This projected growth has attracted substantial investments from several global and domestic players, all of whom are vying for dominance in this rapidly expanding market.
As Zepto faces off against such rivals, it needs to maintain a strong financial position and an aggressive expansion strategy to capture market share. The decision to raise capital through a secondary share sale, along with its strategic focus on maintaining a robust cash balance, indicates Zepto’s commitment to staying competitive.
The company’s leadership is acutely aware that to succeed in the quick-commerce industry, it must scale rapidly and continuously enhance its value proposition to consumers. Given the crowded market, achieving profitability, as Palicha has outlined, will not be an easy feat. However, the strong backing of domestic investors and the substantial funds Zepto has raised give it a significant advantage as it looks to secure its place in India’s fast-growing e-commerce sector.
IPO Expectations and Timeline
Zepto’s upcoming IPO is one of the most highly anticipated events in India’s tech and startup ecosystem. With its successful fundraising rounds and ongoing efforts to increase its domestic shareholding, Zepto appears poised to make a strong debut in the public markets.
The company’s current valuation is estimated to be around $6 billion, and analysts predict that the IPO will be highly oversubscribed, given the growing interest in the quick-commerce sector and Zepto’s dominant position in it. The company has not yet disclosed its IPO timeline officially, but the secondary share sale expected in late 2025 will serve as a precursor to the public offering.
It is widely expected that Zepto will file its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in the coming months. The IPO filing process typically includes a comprehensive overview of the company’s financials, operations, and risks, and will provide more clarity on Zepto’s growth trajectory, profitability, and future plans.
A Look Ahead: What Investors Should Expect
As Zepto prepares for its public debut, investors and analysts will be closely watching its moves in the lead-up to the IPO. The company’s growth trajectory, its ability to maintain profitability, and its ability to continue expanding in a highly competitive market will be key factors in determining its long-term success.
For retail investors looking to get in on the action, the upcoming IPO could present a lucrative opportunity. However, it is crucial to weigh the risks, particularly given the intense competition in the quick-commerce space.
For now, Zepto’s focus is squarely on preparing for the IPO, managing its cash reserves, and ensuring that it continues to strengthen its position as a market leader. The $300 million pre-IPO secondary share sale is a crucial step in this process, and the company’s moves in the coming months will provide further insight into its long-term strategy.
Table: Timeline of Zepto’s Fundraising and Key Events
| Date | Event | Amount Raised | Investor/Source |
| June 2024 | Series D Funding Round | $665 million | Glade Brook Capital, StepStone Group, Nexus Venture Partners |
| August 2024 | Series E Funding Round | $340 million | General Catalyst, others |
| November 2024 | Domestic Investment Round | $350 million | Motilal Oswal, Claypond Capital |
| October 2025 (Expected) | Secondary Share Sale (Pre-IPO) | $300 million | SBI Mutual Fund, Axis Mutual Fund, ICICI Prudential Mutual Fund |
| 2025 (Projected) | IPO Filing | TBD | TBD |
