Mumbai-based quick commerce startup Zepto is reportedly in advanced discussions to secure $100-million in a funding round, its third major investment round in the past six months. The company aims to raise the capital from Indian family offices and high-net-worth individuals (HNIs), according to sources familiar with the matter.
Asset management firm Motilal Oswal, which previously invested $40 million in Zepto, is said to be managing the funding mandate. According to sources, Motilal Oswal is investing around $40 million and facilitating an additional $100 million from Indian family offices and other HNIs. Raamdeo Agrawal, chairman and co-founder of Motilal Oswal, is expected to contribute around $15 million in his personal capacity out of the $40 million investment. Agrawal is already an investor in Zepto. “Commitment for about $100 has been received, but the round could go upto $150 million or further,” said a person aware of the developments.
Talks have been ongoing for about three months and are expected to materialise soon. The new investment is anticipated to value Zepto at a post-money valuation of $5 billion, consistent with its recent $340 million financing round in August. The aim is to increase domestic ownership ahead of the company’s planned initial public offering (IPO) next year, sources said.
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The company, which popularised ultra fast deliveries of groceries within 10 minutes, has raised approximately $1.6 billion since its inception three years ago. Over $1 billion of this has been secured in the past four months alone. Zepto is also expanding into traditional e-commerce and retail categories like fashion and electronics.
It raised $665 million at a valuation of $3.6 billion in June and secured another $340 million at a $5 billion valuation in August.
Initially based in Singapore, Zepto shifted its headquarters to Mumbai to prepare for public listing. The company is currently in the middle of another shift, this time to Bengaluru, which is expected to complete by mid-November, according to sources.
Zepto has appointed Goldman Sachs, Morgan Stanley and Axis Capital as investment bankers for the IPO and is in the process of finalising additional advisors.
Zepto competes directly with other quick commerce players such as Zomato-owned Blinkit, Prosus-backed Swiggy’s Instamart, and Tata’s BigBasket. The quick commerce sector in India is experiencing robust expansion, with projected sales exceeding $6 billion this year. This surge has prompted traditional e-commerce companies like Flipkart, Myntra and Nykaa to accelerate their delivery times to remain competitive.
The rise of quick commerce is impacting traditional retailers as well. Shares of D-Mart’s parent company fell this week after the firm acknowledged losing some business to quick commerce startups. Analysts noted that these startups are expanding cities, categories, creating parallel commerce for convenience-seeking customers.
Zepto claims it has increased its annualised net revenue run rate in recent months. In a meeting with investors in August, co-founder and CEO Aadit Palicha projected that the company would grow by 150% over the next 12 months.
Zepto did not immediately respond to requests for comments.
From: financialexpress
Financial News
