Online grocery startup Zepto in negotiations for a $250 million secondary sale, allowing current shareholders to sell part of their equity ahead of its planned IPO later this year. This move will increase the stake of Indian investors in the company.
The discussions are reportedly with the private equity divisions of Motilal Oswal Financial Services Ltd. and Edelweiss Financial Services Ltd., who want to purchase shares in the secondary sale, according to sources familiar with the matter.
Zepto won’t be raising any additional funds in the process. Instead, employees and existing investors will have the opportunity to sell their shares for cash. The startup expects to execute the sale at around $5 billion, matching its valuation from the last funding round held late last year.
Zepto wants to increase Indian investor ownership before its upcoming IPO, either later this year or early 2026. Indian shareholders hold around 33% of Zepto’s equity, with founders Aadit Palicha and Kaivalya Vohra owning roughly 20%. The goal is to raise the Indian shareholder stake to approximately 50%, according to sources familiar with the matter.
Zepto, Motilal Oswal, and Edelweiss have not yet responded to requests for comment.
Secondary stock sales have traditionally been controversial, as they allow managers and employees to cash out before an IPO, potentially diminishing their motivation to grow the company. However, these sales have become more common in recent years, with companies using them to reward employees and allow investors to exit, helping to boost morale.
Zepto operates in India’s highly competitive and low-margin grocery delivery market, facing stiff competition from players like Amazon India, SoftBank-backed Swiggy, publicly listed Zomato, and Tata Group’s BigBasket.
Founders Aadit Palicha and Kaivalya Vohra, both 22, are childhood friends who left Stanford University’s computer science program to return to India and launch the startup in 2021 when they were still teenagers.
Zepto’s $250 million secondary sale will increase the shareholding of Indian investors ahead of its anticipated IPO. By providing a cash-out opportunity for employees and existing shareholders, the company seeks to boost local ownership and position itself for future growth in India’s competitive grocery delivery market.
