Zepto Faces Lower Valuation for Upcoming IPO Amid Profitability Concerns

Quick-delivery startup Zepto is aiming for an initial public offering (IPO) valuation substantially below its peak $7bn valuation, Bloomberg reported. The firm secured that $7bn valuation during a funding round in October 2025.

Concerns over high spending rates has cooled market enthusiasm, casting doubt on when the business will become profitable.

Overseas funds have expressed interest at a pre-money valuation of roughly $4.5 billion, people familiar with the matter said. Local institutional buyers peg the firm's worth even lower, placing it between $3 billion and $3.5 billion, they added, as per BBG.

The startup wants to secure up to $850 million from the public issue. It is still negotiating with potential buyers, the people said. They added that the ultimate valuation, offering size and listing schedule remain subject to change.

Shifting Market Sentiment

Quick-commerce firms, spearheaded by Eternal Ltd.'s Blinkit, captured massive city markets and secured billions from global backers. However, that initial excitement cooled as financiers demanded clear paths to profitability.

This changing mood dragged down shares of competitor Swiggy, which plunged nearly 29% below their late 2024 debut price.

In the unlisted market, Zepto shares are changing hands at about ₹39 each, valuing the company at about ₹492 billion ($5.1bn), according to UnlistedZone.com, a platform that facilitates transactions in private company shares. The stock is down about 33% from its March level, reported BBG.

IPO Structure and Backers

The draft prospectus shows the offering consists of a fresh share issue worth ₹80.1 billion ($831million) alongside an offer for sale of 113 million shares from current backers.

Zepto plans to deploy the capital raised from the new shares to grow its dark-store footprint, upgrade technology systems and support expansion plans.

Zepto, backed by Nexus Venture Partners, Glade Brook Capital Partners and StepStone Group, competes with Amazon's India business as well as local rivals Swiggy, Blinkit and Tata Group's BigBasket.

The IPO is being managed by Axis Capital Ltd., Motilal Oswal Investment Advisors Ltd. and the Indian units of Morgan Stanley, HSBC Holdings Plc and Goldman Sachs Group Inc.