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Zepto IPO Faces Valuation Gap, Defers Deal?
30 Jul
Summary
- Zepto's IPO valuation indications are $2.5-3 billion.
- This valuation is below its last private funding round.
- The company may defer its IPO if price gap doesn't close.
Quick commerce firm Zepto is reportedly in discussions regarding its initial public offering (IPO) pricing, with the possibility of deferring the share sale in the upcoming weeks. This potential delay stems from valuation indications received from large institutional investors, which are in the $2.5-3 billion range. This valuation is significantly lower than the $3.5-4 billion discussed earlier and well below the $7 billion valuation from its last private funding round in October last year.
The Aadit Palicha-led startup has also explored reducing the IPO size, which was originally planned at $850 million (₹8,010 crore), by over 20%. Zepto is reportedly pressing for better terms and a deferment is on the table if the price gap does not close within the next two weeks. The validity of Zepto's current IPO draft papers extends until August 21.
Zepto faces growing challenges as it taps the public market, grappling with high cash burn and intensifying competition in the quick commerce sector. Analysts and industry executives have previously raised concerns about its aggressive pricing strategy, which appears to prioritize growth over monetization. The company competes with rivals such as Blinkit, Instamart, Flipkart Minutes, Amazon Now, BigBasket, and JioMart.
