Zepto has postponed its initial public offering after investors slashed the company's valuation by 68% during the roadshow. The delay underscores a growing gap between what Indian startups think they're worth and what the market is willing to pay.
Why the valuation was cut
The quick-commerce startup had been preparing to go public, but the roadshow revealed a stark mismatch. Investors balked at the price tag, forcing Zepto to pull the offering. The 68% cut is one of the steepest for a high-profile Indian startup in recent months. The company didn't disclose the exact pre-money valuation it had sought or the revised figure, but the scale of the reduction signals deep skepticism about profitability timelines in the quick-commerce sector.
What the delay means for Indian startups
Zepto's setback is the latest sign that the frothy valuations of 2021 are no longer flying. A string of Indian tech firms have faced similar pushback when trying to list. The valuation gap — the difference between private market expectations and public market reality — is now a central challenge. For startups that raised big rounds at high multiples, the IPO window has narrowed. Investors are demanding clearer paths to profit, not just growth at any cost.
Pivot to domestic funding
With the public market route blocked for now, Zepto is shifting its focus to domestic investors. The company is reportedly in talks with Indian mutual funds and family offices to raise a new round. That's a strategic pivot: instead of chasing foreign capital, Zepto is betting that local institutions will have a longer-term view and more patience. But it's not a sure thing. Domestic investors have also grown cautious after several high-profile startup failures.
The question now is whether Indian capital will fill the gap — or whether Zepto will have to accept a much lower valuation than its founders and early backers had hoped for. No new IPO timeline has been set.
