Team Startupcity

·  Zepto secures Rs 400 Cr from Motilal Oswal Financial Services as part of treasury investment strategy.

·  Marks fourth funding round since early 2024, boosting IPO readiness.

·  Quick commerce sector shifting toward inventory-led models to strengthen domestic ownership under FDI norms.

Fast commerce unicorn Zepto has raised Rs 400 crore from Motilal Oswal Financial Services, another hefty funding milestone for the IPO-bound firm. In a exchange filing, Motilal Oswal termed the acquisition as one of its treasury investment scheme whose objective is to generate sustainable, long-term returns.

This new capital follows Zepto's $350 million raise in November last year, led by Motilal Oswal's Private Wealth arm. Indian HNIs and family offices associated with Taparias, too, participated in the round then, along with Mankind Pharma, RP Sanjiv Goenka Group, Cello, Haldiram Snacks, Sekhsaria, and Kalyan, among others.

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Aadit Palicha-led Zepto has been diligently gearing up for its public launch, focusing on unit economics and lowering cash burn two essentials in the competitive space of quick commerce. The sector is also witnessing a strategic pivot towards inventory-led models to consolidate domestic ownership and align with FDI norms. Although 100% foreign investment in the marketplace model is permitted, there are restrictions on inventory-based formats under which platforms are forced to own stock.

Competitor Blinkit, under the mantle of Eternal, is looking to convert its dark stores into an inventory model over the next few quarters. Its November 2024 $1 billion QIP witnessed 21% subscription coming from the mutual fund arms of Motilal Oswal, in addition to ICICI MF, HDFC MF, and Kotak. Swiggy too is mulling such a switch, with CFO Rahul Bothra mentioning that the company has already achieved 40% domestic ownership.

For Zepto, this new funding is the fourth capital raise since the early part of 2024. Prior to the November round, it raised $340 million at a $5 billion valuation, on top of an initial $665 million raise from new and existing investors such as Avenir, Lightspeed, and Avra. Most recently, Zepto raised Rs 7.5 crore ($0.9 million) from Elcid Investments Ltd. and Rs 25 crore from MapmyIndia at a $6.1 billion valuation to incorporate enhanced mapping solutions onto its platform.