Zepto Rejects Flipkart's Acquisition Offer, Eyes $2.5B Valuation In New Funding

Flipkart held discussions with quick-commerce player Zepto regarding a potential acquisition, but the talks have stalled and are unlikely to resume, according to a media report.

What Happened: According to an ET report, instead of opting for a strategic sale, Zepto chose to pursue a financial round to secure new funding. The startup is currently negotiating with several private equity funds and existing investors to finalize this funding round, which is expected to value Zepto at approximately $2.5 billion (₹20,877 crore), nearly double its previous valuation.

The momentum in the quick commerce sector has significantly driven up Zepto's valuation over the past few months.

Despite Flipkart’s interest in acquiring a majority stake in Zepto for less than $2 billion (₹16,701 crore), with the founders continuing to manage operations, the discussions did not progress beyond a verbal offer.

See also: Why Infosys Shares Are Down Even As Q4 Profit Beat Estimates

Zepto is now engaging with potential investors including General Atlantic and the Abu Dhabi Investment Authority (ADIA) to raise between $250-300 million (₹2,088-2505 crore), just six months after securing a round at a $1.4 billion (₹11,690 crore) valuation.

Zepto's CEO, Aadit Palicha, stated the company is not seeking strategic investors at present and dismissed market rumours about ongoing discussions with external parties.

Palicha emphasized that Zepto still has most of its capital from the last funding round and is nearing EBITDA positivity, which shapes its conservative approach toward future fundraising as it prepares for a possible initial public offering (IPO). The company continues to explore external investors to lead this new financing round, with former Y-Combinator Continuity lead Anu Hariharan potentially investing through her new firm, Avra.

Read next: How ICICI Securities Share Price Is Doing After Q4 Results, Dividend