Motilal Oswal goes big on Zepto, purchases shares worth $100 mn | Company Business News-OxBig News Network

Motilal Oswal and Raamdeo Agrawal, the founders of Motilal Oswal Financial Services Ltd (MOFSL), have bought shares worth $50 million each in their personal capacity in quick-commerce startup Zepto, a person familiar with the matter told Mint.

Apart from this, MOFSL is preparing to lead a secondary fundraising round to the tune of $250 million in Zepto with participation from Edelweiss, Hero Fincorp and other investors, this person added. 

To be clear, shareholders in a secondary transaction sell their stakes to other existing or new investors and no new capital is injected into the company. Secondary transactions generally take place at a discount to the primary shares. Moneycontrol was the first to report on the development.

Motilal Oswal declined to comment on the transaction while Zepto, Edelweiss and Hero Fincorp did not immediately reply to emailed queries.

Mumbai-based Zepto, which is gearing up for a public market listing shortly, entered the coveted unicorn club in 2023 when it raised $200 million at a valuation of $1.4 billion. 

Last year, Zepto secured $350 million in funding led by Motilal Oswal’s private wealth division. That fundraising round included investments from wealthy Indians and homegrown family offices and financial institutions, marking the largest 100% domestic fundraising in India’s startup ecosystem.

A quick-commerce race

Over the last year, Zepto has raced its way to secure some of the biggest funding rounds in India so far.

In August last year, Zepto secured $340 million in a funding round led by General Catalyst at a valuation of $5 billion. Other new investors, including Dragon Fund and Epiq Capital, participated in the round, while existing investors such as StepStone, Lightspeed, DST and Contrary increased their stakes.

That transaction had come nearly two months after Zepto raised its largest funding of $665 million at a valuation of $3.6 billion. It planned to use the capital to double the number of its dark stores, or warehouses, to 700 by March 2025.

Aadit Palicha and Kaivalya Vohra founded Zepto in April 2021, when covid curfews had made people in India’s large cities accustomed to buying daily staples online.

Zepto directly competes with Swiggy’s Instamart, Zomato’s Blinkit, and Flipkart’s Minutes, which in recent years have fuelled demand for instant deliveries, growing their network of dark stores and expanding their range of products. Conglomerates such as the Tata Group, Reliance, and Amazon have experimented with similar business models.

India’s quick-commerce market grew 77% in 2023 to reach $2.8 billion in gross merchandise value, accounting for 5% of India’s overall e-commerce market, according to consulting firm Redseer.