Zepto IPO: Delivery startup picks Axis Capital, Goldman Sachs, Morgan Stanley as advisors, says report

Zepto IPO: Delivery startup Zepto has picked Axis Capital, Goldman Sachs, and Morgan Stanley as advisors for its planned initial public offering (IPO) in FY25, Moneycontrol reported citing sources.

Zepto, Axis Capital, Goldman Sachs and Morgan Stanley did not respond to queries, as per the report.

Livemint could not independently verify the development.

What We Know So Far

One source told the publication that the IPO is planned for around August 2025, in the second half of fiscal year 2025.

Another source told MC that the Singapore-based company is looking to raise $450-500 million through the listing. They added that the offer for sale (OFS) "is still unclear", the report said.

Valuation ahead of the IPO is also still under work, the report noted. The startup was last valued at $5 billion in August after raising $340 million in funding.

Notably, in order to list in India, Zepto would have to shift its base back into the country from Singapore, and CEO Aadit Palicha has, in interviews, said that the company would complete this process soon.

Surge of Funding Pre-IPO

On August 30, Zepto secured follow-on financing of $340 million led by US-based venture capital firm General Catalyst, just two months after raising a pre-IPO funding round of $665 million. This took its valuation to $5 billion.

New investors Dragon Fund and Epiq Capital joined the August round, while existing investors StepStone, Lightspeed, DST and Contrary increased their stakes.

Zepto, which is gearing up for a public market listing next year, gained its coveted unicorn status a year ago when it raised $200 million at a valuation of $1.4 billion.

India's Quick Commerce Space

Palicha and Kaivalya Vohra founded Zepto in April 2021, when COVID-19 curfews had made people in India’s large cities accustomed to buying daily staples online.

India’s quick-commerce market grew 77 per cent in 2023 to reach $2.8 billion in gross merchandise value (GMV), accounting for 5 per cent of India’s overall e-commerce market, according to consulting firm Redseer.

Analysts, however, worry that quick commerce’s potential is limited to metro cities, which is likely to impact players in the long run. “In the next 2-3 years, penetration in the metro cities may witness a plateau,” Karan Taurani, an analyst at Elara Capital, told Mint, adding that rising competition in the segment will require firms to be capital-rich and invest sufficiently in expanding in non-metro cities as well as technological capabilities.