Zepto Targets 50% Indian Ownership with $250M Secondary Share Sale

With the secondary share sale of almost $250 million, Zepto, an online grocery startup, is preparing for an introduction most awaited one. It aims to bring in greater participation by Indian investors with this strategic shift before the IPO.

Individuals and Institutions Vital to the Deal

• Initiations of negotiations are being carried out for acquiring shares by private equity firms Motilal Oswal Financial Services Ltd. and Edelweiss Financial Services Ltd.
• It is a secondary sale, whereby Zepto would not be raising any new capital but would let employees and existing investors cash out with their sales.
• Deals are speculated to be closing with a valuation just above $5 billion, in line with its last funding round.

Significance of the move

• Lifting Indian Ownership: Currently, Indian investors own approximately 33% of Zepto's cap table, move to boost this percentage almost to 50%.
• Ownership by Founders: Co-founders Aadit Palicha and Kaivalya Vohra hold circa 20% of Zepto collectively.
• IPO Readiness: Strategically, for an IPO planned for late 2025 or early 2026, Zepto upshuffles its shareholding mix.

This secondary sale represents Zepto's commitment to increasing reputation and local investor confidence, before entering the public market. Neither Zepto nor Motilal Oswal has responded, while Edelweiss has said nothing. At a time when India's quick-commerce market is heating up, this move on the part of Zepto could help lay the pathway for other startups preparing to go public. 

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