Zepto in talks to raise up to $150 million from Motilal Oswal, others in third funding round in four months: Report

Investor interest in Zepto has surged as rapid delivery startups continue to disrupt traditional retail players like DMart and experience exponential growth, according to the report.

"Motilal Oswal is expected to invest about $40 million directly, while also facilitating an additional $60-$110 million from Indian family offices and other HNIs. The total round could range between $100 and $150 million, but it’s too early to confirm the exact figure," one source told Moneycontrol.

Of the $40 million, around $15 million will be invested personally by Raamdeo Agrawal, chairman and co-founder of Motilal Oswal, who already holds a stake in Zepto.

This will further increase his investment in the company, as per the report.

Talks have been ongoing for approximately three months, with a deal expected to finalize soon.

Zepto’s valuation is expected to remain steady at $5 billion in this funding round, with the goal of boosting domestic ownership ahead of its initial public offering (IPO), reports Moneycontrol, citing sources.

The groundwork for Zepto’s IPO is already underway, with the company having appointed Goldman Sachs, Morgan Stanley, and Axis Capital as its lead bankers, with additional advisors to be finalized soon, as first reported by Moneycontrol on Sept. 7.

However, neither Motilal Oswal nor Zepto officially responded to queries from Moneycontrol yet.

If the talks between Motilal Oswal and Zepto materialize, this would mark Zepto’s third major funding round in under four months as it builds its war chest to compete with major players like Blinkit (owned by Zomato), IPO-bound Swiggy, and other rivals like Walmart’s Flipkart Minutes and Tata’s BigBasket, as reported by Moneycontrol.

Zepto previously raised $665 million in June at a valuation of $3.6 billion, followed by another $340 million in August, bringing its valuation to $5 billion, according to reports.

In total, the three-year-old company has raised $1.6 billion, with over $1 billion secured in just the last four months.

If Motilal Oswal acquires a stake in Zepto at an $8 billion valuation, the company’s valuation will have skyrocketed nearly 500 percent in just 18 months, going from $1.4 billion in August 2023 to its current $8 billion estimate, as the sector continues to exceed expectations and defy skeptics, according to Moneycontrol.