Zepto IPO: Unicorn creates new entity to streamline operations, IPO expected within three to four months, according to report

Express commerce company Zepto has set up a new entity, Zepto Marketplace Private Limited, to streamline its operations ahead of its upcoming initial public offering (IPO). According to media reports, Zepto Marketplace Private Limited was officially registered on October 22, 2024.

The company currently operates on a business-to-business (B2B) model. Through its Indian subsidiary, Kiranakart Technologies Pvt Ltd, co-founded by Aadit Palicha and Kaivalya Vohra, Zepto procures goods from various brands and sells them exclusively to a select group of companies through the Zepto platform.

Kiranakart Technologies operates Zepto to source products directly from brands and distribute them to a select group of companies, including Geddit Convenience, Drogheria Sellers and Commodum Groceries. These companies are companies that are licensed by Zepto, which then sell the products on the app through a licensing agreement.

In comparison, competitors like Blinkit (owned by Zomato) and Swiggy Instamart have adopted a marketplace approach that allows multiple sellers to list their products directly to consumers.

Zepto also appears to be making a similar move by registering Zepto Marketplace Private Limited on October 22, 2024. The move may signal a shift away from its current B2B model, bringing it closer into alignment with its stock-listed counterparts Blinkit (owned by Zomato). And Swiggy Instamart.

Additionally, Zepto is said to be in the final stages of preparing draft documents for an IPO, with plans to file them by March or April. Following Singapore’s approval, Express Trade will move its holding entity to India, the Economic Times reported.

The company, which is headquartered in Bengaluru, has scheduled a board meeting on January 19 to discuss the size of the IPO, selection of bankers for the issue and finalizing decisions related to moving the holding entity to India.

Zepto initially aims to secure at least $450 million in financing, although that number may see adjustments leading up to the filing of draft IPO paperwork. It is worth noting that prominent Wall Street firms such as Morgan Stanley and Goldman Sachs are currently in discussions with Zepto regarding their upcoming IPO.

Following a successful financing round on November 22, Zepto raised $350 million, bringing its total cash reserves to approximately $1.4 billion. This significant capital infusion favorably positions the company amidst intense competition from both established players and emerging contenders like Flipkart Minutes in the rapidly expanding market.