Zepto Raises INR 400 Cr From Motilal Oswal Financial Services

SUMMARY

Quick commerce major Zepto has raised INR 400 Cr (about $45.7 Mn) from Motilal Oswal Financial Services Ltd (MOFSL)

MOFSL said that the share acquisition is a part of the treasury investment book, "executed with the objective of generating sustainable, long-term returns"

This marks the third instance of the quick commerce unicorn raising capital from a listed entity

Adding to its spree of fundraises in the past two weeks, quick commerce major Zepto has now raised INR 400 Cr (about $45.7 Mn) from financial services company Motilal Oswal Financial Services Ltd (MOFSL).

The all-cash transaction saw MOFSL subscribe to 7.6 Cr compulsorily convertible preference shares (CCPS) of the startup. In an exchange filing today, MOFSL said that the share acquisition is a part of the treasury investment book “executed with the objective of generating sustainable, long-term returns”.

This follows non-banking finance company (NBFC) Elcid Investments investing an additional INR 7.5 Cr in the quick commerce major and geotech giant MapmyIndia announcing plans to join Zepto’s cap table with an investment of INR 25 Cr.

Notably, the latest fundraise comes months after MOFSL’s founders Motilal Oswal and Raamdeo Agrawal bought Zepto shares worth $100 Mn in May. This was part of a larger $350 Mn round, with the remaining amount being mopped up by Motilal Oswal’s clients, including domestic family offices.

The back-to-back rounds are part of Zepto’s push to reduce foreign ownership as it gears up to go public. While Zepto was initially eyeing a listing on the Indian bourses in 2025, it has deferred the plans to next year to achieve profitability and increase domestic ownership in the startup.

The capital infusion will also help Zepto amid high competition in the quick commerce segment. Besides Blinkit and Swiggy’s Instamart, Zepto is pitted against newer players like Amazon and Flipkart Minutes in the quick commerce market. There have also been reports of Zepto slowing down over the past few months as it prepares to file its IPO papers.

Zepto is yet to reveal its FY25 numbers but according to the exchange filing of Elcid Investments, announcing its investment in the quick commerce major, Zepto’s turnover zoomed to INR 11,109.9 Cr in FY25.

In FY24, the unicorn managed to double its consolidated revenue YoY to INR 4,454.52 Cr. Its net loss remained almost flat at INR 1,248.64 Cr as against INR 1,271.84 Cr in FY23.

The development also comes at a time when Zepto has been grappling with a slew of operational challenges. Earlier this year, Maharashtra Food and Drug Administration (FDA) revoked the food business licence of Zepto’s parent’s warehouse in Mumbai’s Dharavi citing serious food safety violations at the premises. The suspension was later revoked following a detailed re-inspection by the state’s food safety agency and the submission of a compliance report by the company.

Additionally, the Competition Commission of India (CCI) has sought additional information from FMCG distributors’ body All India Consumer Products Distributors Federation (AICPDF) in connection with an antitrust probe into Zepto and other quick commerce players.