Reports note that the company is now looking at the pre-IPO funding round, which is expected to see participation from existing investors
Quick commerce platform Zepto has put its initial public offering (IPO) on hold for now and is now working to raise over Rs 1,000 crore through a pre-IPO placement, media reports noted. The company is eyeing a valuation of around USD 4 to 4.5 billion for the investment.
The company was set for a public listing, but differences over valuation stalled the process. The company was initially planning to raise around Rs 8,000 crore but has since then cut its IPO size to around Rs 5,000 to Rs 6,000 crore, the reports added.
Incoming investors, especially the domestic mutual funds, valued the company at anywhere between USD 2.5 billion and USD 3 billion post-money, much lower than its earlier expectations of raising money at around a USD 5 billion valuation, the reports mentioned.
The company is now looking at the pre-IPO funding round, which is expected to see participation from existing investors including General Catalyst, Goodwater Capital, Nexus Venture Partners and Glade Brook, as per the reports. Securities and Exchange Board of India (Sebi) allows the IPO-bound firms to raise up to 20 per cent of their proposed fresh issue through a pre-IPO placement.
Reports added that raising capital through this route means that the raised capital must be deducted from the fresh issue component of the IPO. Zepto filed updated draft papers with the Sebi in June for an IPO, comprising a fresh issue of shares and an offer for sale by existing shareholders. The company has planned to use the proceeds to expand its dark-store network, invest in technology infrastructure and pursue acquisitions.
