Investment banks like Morgan Stanley, Axis Capital & Goldman Sachs are set to be Zepto's advisors for its initial public offering, set to launch in the latter half of 2025. Zepto aims to raise nearly $500 through the listing. Analysts believe the company's valuation will rise further as it approaches its IPO. Zepto, the quick commerce giant, raised $340 million in the latest round led by new investors like General Catalyst, Epiq Capital & Dragon Fund (Mars Growth Capital). Zepto received further capital injections from existing investors like Contrary, DST, Lightspeed and StepStone. Investors are betting on quick commerce platforms like Zepto following the meteoric rise of quick commerce in India. Following the fresh round, Zepto raised a shocking 1.05 billion dollars across two tranches in just two months. Zepto's push for IPO comes at the heel of Swiggy's plan to launch its own $1.25 billion IPO, while Blinkit, owned by Zomato, is already a listed company since 2021. After the fresh funding, Zepto plans to double its dark stores by March 2025. They aim to increase their market share by opening more stores in Delhi, Mumbai and Bengaluru while adding new stores in locations like Ahmedabad, Vizag, Chandigarh and Nasik. Despite consumer adoption and rapid growth, Zepto still needs to achieve profitability, a challenge faced by most quick-commerce giants. Zepto plans to expand into higher value categories like home goods and electronics, an additional market segment through which they can boost their profit margins and gross sales. Aadit Palicha and Kaivalya Vohra dropped out of Stanford to launch Zepto during the pandemic. The new entrant quickly gained popularity because of its ultra-fast delivery times. They have captured rapid market share despite entering the quick commerce space later than its competitors like Swiggy. The fast adoption rate differentiates Zepto from its competitors. The company gained unicorn status just a year ago when it raised $200 million. Rapid expansions and incoming investments have skyrocketed the company's valuation up to $5 billion compared to $3.6 billion in August 2023. Since its inception in 2021, Zepto has procured around $1.5 billion. Aadit Palicha, the co-founder and CEO of Zepto, spoke about the reasoning behind raising a large chunk of money in quick succession. He stated the rationale was twofold: first, they couldn't pass on the opportunity to onboard Neeraj Arora, a high-quality lead investor. Second, strengthening Zepto's balance sheet was a strategic move. The IPO is still at the budding stage as there are still some unresolved aspects regarding the offering; details about the offer for sale (OFS) still need to be determined. OFS lets investors sell their stock. Zepto can't be listed on the Indian stock exchange unless the company shifts its base from Singapore to India, on the obstacle of shifting bases, the CEO. Aadit Palicha said, "We've started the process of flipping back to India and will wrap it up in the next couple of months.".Zepto's Billion-Dollar Surge
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09 Dec 2024
Aryan Gupta
