Zepto declines Flipkart acquisition bid, aims to raise at $2.5b valuation: report

(From left) Kaivalya Vohra and Aadit Palicha, co-founders of Zepto / Photo credit: Zepto

Indian quick commerce unicorn Zepto has failed to agree on a sale to Flipkart, sources told The Economic Times, dashing the ecommerce giant’s bid for a foothold in India’s instant delivery space.

Flipkart had proposed buying a large stake in Zepto at a valuation of just under US$2 billion. However, the two companies could not agree on Flipkart’s request to gain controlling interest, even with Zepto founders continuing to run the company.

With the deal falling through, the report mentioned that Zepto is negotiating with private equity investors and existing backers to raise a new funding round. The company expects a valuation nearing US$2.5 billion – nearly double the valuation from its previous round – amid the recent momentum in India’s quick commerce space.

While Flipkart declined to comment for the article, Zepto CEO Aadit Palicha stated that the firm isn’t looking for strategic investors, and that he doesn’t comment on market rumors.

A report by consulting firm Redseer estimated India’s quick commerce space to reach US$5 billion in size by 2025. While the space has struggled in Indonesia, Indian consumers have even branched into ordering beauty products via this model.

Flipkart isn’t the only Indian giant to face setbacks in this space. Last year, Reliance-owned JioMart closed down its quick commerce pilot, while Reliance-backed quick commerce startup Dunzo reportedly slashed 300 jobs.

See also: Beauty ecommerce in India gets speedy makeover via quick commerce