Happy Wednesday! Zepto Set to Bulk Up Its Public Offering
As we dive into the midweek hustle, the tech landscape is buzzing with significant developments, particularly in the realm of quick commerce. Zepto, a prominent player in this sector, is reportedly in discussions to increase the size of its upcoming public offering to between $800 million and $1 billion. This ambitious move reflects the company’s confidence in its growth trajectory and market potential.
Zepto’s IPO Plans: A Closer Look
Sources indicate that Zepto’s CEO, Aadit Palicha, has been actively engaging with top mutual funds to discuss the company’s listing plans. The projected gross sales for Zepto are expected to reach an impressive $5.5 billion by the final quarter of FY26, with the company aiming for positive EBITDA, excluding ESOPs. This optimistic outlook is bolstered by the competitive landscape of quick commerce, where Zepto is striving to carve out a larger market share.
An insider revealed, “There will be an overall increase in offering size unless the markets turn wildly the other way. It would be around $800 million or above as at least $300-400 million worth of shares may be sold in OFS, along with an increase in primary fundraising through the issuance of new shares.” However, it’s worth noting that Zepto has faced significant financial challenges, burning through approximately Rs 1,000-1,100 crore in the last quarter alone.
Navigating the Competitive Landscape
In the hypercompetitive quick commerce space, Zepto recently reported gross sales of $3 billion, trailing behind its rival Blinkit, which recorded $3.7 billion. As the company expands its dark store network, it faces the dual challenge of maintaining profitability while scaling operations. Blinkit, for instance, has seen its losses swell to Rs 103 crore in the December quarter due to aggressive expansion efforts, impacting the overall profitability of its parent company, Zomato.
To comply with regulatory requirements for its IPO, Zepto is also working on increasing its domestic ownership to a minimum of 40%. This involves a strategic merger of its Singapore parent unit with its Indian entity, a move aimed at relocating its domicile to India.
Amazon’s Largest Seller Enters Quick Commerce
In other news, Cocoblu Retail, Amazon’s largest seller, is making strides into the quick commerce arena. The company has established a new entity, Cocoblu Quick Commerce, to facilitate rapid delivery operations under Amazon’s Tez service. This shift comes in the wake of Amazon’s divestment from its top merchants, positioning Cocoblu as a key player in the burgeoning quick commerce market.
The total addressable market for quick commerce is projected to grow from $45 billion to $77 billion by 2025, highlighting the immense potential in this sector. Cocoblu’s move is seen as a strategic response to the increasing demand for faster delivery services, a trend that is reshaping the e-commerce landscape.
NRAI vs. Swiggy and Zomato: A Legal Showdown
The National Restaurant Association of India (NRAI) is gearing up for a legal challenge against Zomato-owned Blinkit and Swiggy over their 10-minute food delivery services. The NRAI claims that these companies are operating private labels for their quick delivery services and utilizing restaurant data without consent, raising significant concerns among restaurant partners.
In response, the NRAI plans to hold a town hall meeting to discuss the next steps, following discussions with executives from Zomato and Swiggy. Zomato’s CEO, Deepinder Goyal, has reached out to restaurant partners to clarify that their new 10-minute delivery service, Bistro, is not a private label and emphasizes that Zomato will not compete with its restaurant partners.
Agritech Startup Dehaat’s Strategic Acquisition
In a noteworthy development within the agritech sector, Dehaat has acquired the farm advisory platform AgriCentral from Olam Agri through a business transfer agreement. This all-cash deal underscores Dehaat’s commitment to enhancing its service offerings and expanding its footprint in the agritech space.
Conclusion
As we navigate through the latest updates in the tech and commerce sectors, it’s clear that companies like Zepto and Cocoblu are positioning themselves for significant growth amidst fierce competition. With IPO plans on the horizon and strategic moves into quick commerce, the landscape is evolving rapidly. Meanwhile, legal challenges and acquisitions highlight the dynamic nature of the industry, making it an exciting time for stakeholders and consumers alike. Happy Wednesday, and stay tuned for more updates in the world of tech and commerce!