Motilal Oswal Invests Rs 400 Crore in Zepto, Boosting India’s Quick Commerce Growth

Motilal Oswal Financial Services invests Rs 400 crore in Zepto in a major funding round, strengthening India’s leading quick commerce startup’s expansion and IPO plans.

Motilal Oswal Financial Services has made a significant move in the market with its recent Rs 400 crore investment in Zepto, one of India’s fastest-growing quick commerce startups. This substantial secondary transaction, which follows smaller stake purchases by Elcid Investments and MapmyIndia, is a clear indicator of robust investor confidence. It values Zepto at approximately $5.9 billion and is part of a larger Rs 1,000 crore funding round aimed at boosting Zepto’s domestic ownership ahead of its anticipated public listing.

Motilal Oswal’s infusion was executed via the acquisition of 7.55 crore compulsorily convertible preference shares, as disclosed in regulatory filings. The firm describes the move as part of its treasury investment strategy, aiming to generate long-term, sustainable returns. Other domestic investors are expected to contribute the remaining Rs 600 crore by acquiring shares from Zepto’s foreign investors, with a small primary component augmenting the round. Additionally, Zepto founders are in discussions to raise Rs 1,500 crore through debt, further fueling growth and the transition towards IPO readiness.

Founded in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto has quickly expanded its reach, offering ultra-fast (10-minute) deliveries across major cities. The company operates a network of “dark stores,” supplying fresh produce, daily essentials, and packaged goods. Zepto’s financials underscore its meteoric rise, with FY25 revenue hitting Rs 11,109 crore, a sharp increase from Rs 4,454 crore in the previous year. However, the firm is not without its challenges, addressing issues typical to the sector, such as high cash burn and intense competition from rivals like Blinkit (Zomato), Swiggy Instamart, BigBasket, and Flipkart Minutes.

The strategic ownership shift, catalyzed by major Indian investors, positions Zepto to comply with regulatory norms and capitalize on growth opportunities. This shift, along with Zepto’s progress toward breakeven and a local listing, its aggressive fundraising, and operational expansion, all highlight investor faith in the company’s ability to innovate and lead within India’s dynamic quick commerce landscape.