Zepto secures $100m investment, valued at $5b ahead of IPO

Motilal Oswal and Raamdeo Agrawal, founders of Motilal Oswal Financial Services, have invested US$50 million each in Zepto, a quick commerce startup.

This investment was made through a secondary share purchase from previous foreign investors, including Rocket Internet and Lachy Groom.

The deal values Zepto at US$5 billion and is aimed at increasing domestic ownership ahead of a potential IPO.

Motilal Oswal Financial Services is also expected to lead a US$250 million funding round for Zepto, with resources from its clients. Other potential participants include Edelweiss and Hero Fincorp.

🔗 Source: Moneycontrol

🧠 Food for thought

1️⃣ Strategic shift to majority Indian ownership ahead of IPOs is emerging as a pattern

Zepto’s move to increase Indian ownership from 33% to 50% reflects a deliberate strategy to gain regulatory advantages for its upcoming IPO in late 2025 or early 2026 1.

This $100 million investment from Motilal Oswal founders is part of a larger $250 million secondary sale specifically designed to transfer ownership from foreign to domestic investors without raising new capital 2.

The pattern mirrors competitor Blinkit’s earlier transition to an Indian-owned model, suggesting potential regulatory or operational benefits in the quick commerce sector 3.

This ownership transition isn’t unique to Zepto—it represents an emerging trend where successful Indian startups increasingly seek domestic capital as they mature toward public offerings.

2️⃣ Inventory model adoption drives ownership restructuring decisions

Zepto’s push for Indian ownership is strategically linked to adopting an inventory model, which could significantly improve cash flow management compared to the marketplace approach 1.

Competitor Blinkit has already implemented an inventory ownership model, allowing it to directly manage stock and potentially achieve better margins, creating competitive pressure for Zepto to follow suit 1.

The inventory model represents a fundamental operational shift that requires different regulatory compliance, explaining why ownership structure becomes a critical factor in strategic planning 3.

This approach contrasts with Swiggy’s stance that “the math doesn’t work out” for the inventory model, highlighting the divergent strategies within India’s competitive quick commerce landscape 1.