Quick commerce firm Zepto will raise private capital from its existing domestic investors before proceeding with its initial public offering (IPO), founder and chief executive Aadit Palicha told employees during a company-wide townhall, according to people aware of the development.During the 30-minute townhall held at Zepto's Bengaluru headquarters, Palicha said the company would first complete the ongoing private fundraising before returning to the public markets. The company had earlier initiated plans to raise around ₹1,000 crore from existing domestic investors in a pre-IPO financing round, businessline had reported.The move effectively pushes back Zepto's listing timeline, although the company is not required to file fresh draft papers immediately. According to people familiar with the matter, Zepto's confidential draft red herring prospectus (DRHP), filed with the Securities and Exchange Board of India (SEBI), remains valid until November 2027, giving it flexibility on when to launch the IPO.Funding updateHowever, once the ongoing private financing is completed, the company will have to update its financial statements before moving ahead with the public issue, sources said. The revised financials are expected to reflect the latest operating performance as well as the impact of the fresh capital infusion.The pre-IPO round is expected to close by the end of August at a valuation of $4.2-4.5 billion, according to people familiar with the discussions. Existing domestic investors are expected to participate in the round.Under SEBI regulations, companies planning to go public can raise up to 20 per cent of the proposed fresh issue through a pre-IPO placement. Any amount raised through this route is adjusted against the fresh issue component of the IPO.Businessline had earlier reported that Zepto had pared its planned IPO size to nearly half of the originally proposed ₹5,000 crore after public market investors indicated lower valuation expectations than the company had initially sought.The company is instead focusing on improving its financial profile before returning to the market. People aware of the matter said Zepto has reduced its cash burn in recent quarters and believes stronger operating metrics and an improved path to profitability could support a better public market valuation when it eventually launches its IPO.Published on July 31, 2026