Quick-commerce startup Zepto has postponed its Initial Public Offering (IPO) to 2026, while the company is preparing to file its Draft Red Herring Prospectus (DRHP) with SEBI this year. Zepto is focusing on reducing its cash burn and achieving profitability. The process of selecting investment banks for the IPO is underway, and the company is also planning to raise significant funds through private funding.
Zepto Delays IPO Plans
Emerging quick-commerce unicorn Zepto has postponed its IPO by a year. The company now plans to list in 2026. Previously, Zepto aimed for an IPO in 2025, but is now prioritizing strengthening its financial position and reducing cash burn.
Zepto's CEO and co-founder, Aadit Palicha, informed CNBC-TV18 that the startup will file its Draft Red Herring Prospectus (DRHP) this year (2025). However, he stated that an IPO is currently not feasible this year. Sources indicate the company is adjusting its funding and operational strategies to create a more robust profit profile.
In recent months, Zepto has reevaluated its financial projections. The company missed its revenue and cost targets in the January-March 2025 quarter, leading to the decision to postpone the IPO. Despite this, Zepto has increased its planned IPO fundraising to approximately $800 million, up from an earlier target of $400-500 million.
Investment Bank Selection and IPO Syndicate
For the IPO process, Zepto has partnered with several leading investment banks. JM Financial and Motilal Oswal have joined the IPO syndicate, working alongside previously engaged Goldman Sachs, Morgan Stanley, and Axis Capital. This demonstrates Zepto's accelerating preparations for its public listing.
Approximately 43-44% of the company is currently held by domestic investors. Zepto anticipates a majority ownership stake remaining with Indian shareholders by the time of, or prior to, the IPO. This signifies increasing participation from domestic investors, considered positive for the startup.
Focus on Private Funding
Alongside IPO preparations, Zepto is also focusing on private funding. The company is seeking to raise a substantial amount from international investors. Sources suggest Zepto is planning a funding round of up to $700 million. Existing investors Avenir and General Catalyst have shown interest in co-leading this round. Other existing investors are also considering increasing their stake.
Zepto's CEO, Aadit Palicha, recently met with several potential international investors in the US. However, the final structure of the funding is yet to be determined, and the round could potentially be unsuccessful.
Zepto primarily competes with quick-commerce companies like Blinkit (Eternal) and Swiggy Instamart. In this competitive environment, Zepto is working to reduce its cash burn, control operational costs, and develop a more efficient revenue model. This strategy will be crucial for gaining public market confidence and attracting investors.
