SUMMARY
- Zepto has chosen Axis Capital, Goldman Sachs, and Morgan Stanley as advisors for its IPO, planned for the second half of fiscal year 2025.
- The company aims to raise $450-500 million through the IPO, with a current valuation of $5 billion following a recent $340 million funding round.
- India’s quick-commerce market grew 77% in 2023, but analysts warn that growth may be limited to metro cities, necessitating further capital investment for expansion.
Zepto, a leading quick-commerce startup, has selected Axis Capital, Goldman Sachs, and Morgan Stanley as advisors for its planned initial public offering (IPO) in the second half of fiscal year 2025, according to sources cited by Moneycontrol. While the companies involved have not responded to queries regarding the development, the IPO is reportedly targeted for around August 2025.
The Singapore-headquartered company is expected to raise between $450 million and $500 million through the public listing, although details about the offer for sale (OFS) remain unclear, the report noted. Ahead of the IPO, Zepto is working on its valuation, which was last marked at $5 billion in August 2023 following a $340 million funding round.
Zepto, founded by Aadit Palicha and Kaivalya Vohra in April 2021, has seen rapid growth in India’s burgeoning quick-commerce market. The company recently secured follow-on funding of $340 million led by General Catalyst, just two months after raising a pre-IPO round of $665 million, which propelled its valuation to $5 billion. New investors Dragon Fund and Epiq Capital participated in the August round, while existing investors such as StepStone, Lightspeed, DST, and Contrary increased their stakes.
In preparation for the IPO, Zepto may need to relocate its headquarters from Singapore to India, a move CEO Aadit Palicha has confirmed is underway. The company first achieved unicorn status in August 2022 after raising $200 million at a valuation of $1.4 billion.
India’s quick-commerce market grew by 77% in 2023, reaching $2.8 billion in gross merchandise value (GMV) and capturing 5% of the country’s overall e-commerce market, as per Redseer. However, analysts caution that the growth potential of the quick-commerce sector may be limited to metro cities, which could impact companies like Zepto over time. Karan Taurani, an analyst at Elara Capital, stated that market penetration in metro cities may plateau in the next 2-3 years. Taurani also emphasized the need for firms in this segment to be well-capitalized and invest heavily in expanding into non-metro areas and enhancing technological capabilities to remain competitive.
