Zepto In 2025: Lost Rhythm, Bleeding Coffers And A Fresh Shot At IPO

Zepto has its own rhythm. Every fund-raising kicks off a cycle, starting with a period of hyper-expansion, followed by a deliberate consolidation phase to mend its unit economics, which leads it to the next round of capital inflow. 

It paid off, making Zepto the third biggest force in India’s quick commerce market, which is expected to become a $40 Bn opportunity by 2030, after Swiggy Instamart and Zomato-run Blinkit. The strategy helped jack up the valuation of the company before every round of capital raise.  

The cycle revolved twice or thrice every year until the brakes were slammed in 2025 after making just one full cycle, mopping up only $450 Mn, which was way below last year’s $1.3 Bn funding from three cycles. 

It’s been a bumpy ride indeed for the quick commerce startup. Its ambitious $800 Mn-$1 Bn public float stayed in limbo and, what followed instead, was a turbulent year marked by delays, rollbacks, and strategic pivots. As 2025 winds down, Zepto finds itself battling numerous issues that roiled it through the entire year. 

While the company postponed plans to file draft IPO papers with SEBI, it also had to scale down Zepto Cafe venture. An organisational restructuring cost it several key-level exits, push for automation left more than 500 without jobs, and it lost market share to Instamart and Blinkit. Its alleged dark-pattern practices and price manipulation too came under the regulatory scanner during the year. 

The rhythm was lost, yet cofounder Aadit Palicha sounded upbeat when Inc42 caught up with him in December 2024. “Headwinds are natural in businesses. There’s enough room for us to revive and regain the momentum,” he had said. “We are going full throttle on growing the business with the $450 Mn we raised this year.”

What Derailed The IPO Plan In 2025

Zepto had internally targeted the April-June quarter for filing its DRHP. The strategy was clear: grow at a record pace till March, increase revenue run-rates, and file the papers when the numbers are their peak. But, as time ticked by, some earlier decisions began firing back.

After its late 2024 round, Zepto had switched to its typical hyper-expansion mode. It added nearly 110 dark stores to its network, expanded into various micro markets, and introduced features like quick exchange, to secure consumer stickiness. Palicha claimed Zepto clocked a gross order value of $3 Bn in December, which hit $4 Bn by April.

Rapid expansion comes with an equally rapid escalation in costs. According to Arc, Zepto spent INR 660 Cr in January alone and continued burning INR 450-480 Cr a month until March. The startup was heavily dependent on the Q4 FY25 numbers to propel the IPO filing. This time, however, Zepto’s rivals too went into an aggressive phase of growth. 

Blinkit and Instamart, both backed by publicly listed parents Zomato and Swiggy, had an unprecedented access to fresh capital. While Zomato raised nearly $1 Bn from QIP to fuel Blinkit’s expansion, Swiggy used INR 5,400 Cr from its IPO proceeds to accelerate Instamart. Both upgraded their dark-store networks and improved delivery density.

As the quick commerce racing turf began simmering, the cash burn scorched Zepto coffers more. The company was eventually forced to spend heavily just to defend its market share, even though it increasingly eroded its unit economics. A public market listing under such financial strain seemed impossible, forcing the startup to postpone the IPO altogether till June 2026. 

Zepto went on to raise private funds with its troubled financials towards the end of the year. 

Series Of Setbacks Followed Next 

Once the IPO window closed and its unit economics eroded, Zepto found itself with limited strategic options. With poor optics and higher burn rate, it had to de-scale in a bid to extend the cash runway, and also raise the valuation. 

The first and most visible rollback was Zepto Cafe. Until a few months ago, Zepto Cafe had been the company’s most celebrated vertical. Palicha frequently boasted of its progress on social media, arguing that Zepto was uniquely positioned to create a 10 Minute food delivery category. But, by mid-2025, the euphoria fizzled out and Zepto went silent. 

The operational metrics painted a more sobering picture. By July, Zepto shuttered down 45-50 Cafe outlets due to supply constraints and a shortage of trained kitchen staff. It later temporarily closed nearly 200 Cafe locations, citing muted demand.

The development came hot on the heels of Zepto CXO Shashank Sharma calling it quits. When Zepto hit the market with the Cafe mode, only a few competitors inside the quick commerce format were experimenting with food. But, by 2025, the landscape changed dramatically. Swiggy Snacc, Blinkit-Bistro, and Accel-backed Swish – all entered the market with competing propositions, denting Zepto’s early mover advantage. 

Parallel to Cafe pullback, Zepto halted its dark-store expansion, even as rivals ramped up aggressively. Between April and May, Instamart added 118 stores, Blinkit 98, while Zepto added only 22. This marked a critical turning point. Instamart not only surpassed Zepto in store count but also started overtaking it in order volumes. The gap widened further over the subsequent months. 

To shore up its revenue without expanding burn further, Zepto introduced a series of cash-preserving changes. It increased the commission charged to certain brands, cut back user-side discounts, and extended vendor payment cycles. But the most damaging issue for Zepto was the backlash around its dark-pattern of price-hidden handling fees, dynamic surge fees and unclear delivery charges, further pushing users away from the platform. 

By July 2025, Zepto’s monthly active user base shrank to 4.9 Mn, while for Blinkit, it surged to 6.2 Mn. Both the platforms were at 5.5 Mn until only six months back. A BoFA report in September showed Blinkit bagging over 50% of the market share, Instamart growing its GOV by 22% on-quarter, and Zepto’s share sliding to 23-25%. 

An internal restructuring was foretold in the backdrop of slowdown in business. The restructuring focussed on driving automation and reducing overhead, and insiders suggest the process will continue well into the next year. Since April, Zepto laid off around 500 employees across customer support, payments, replenishment, Cafe operations, and expansion. 

Zepto’s private-label brand Relish too was roiled by weak customer feedback. In a telling reversal, the startup was forced to restore Licious, Relish’s direct competitor, to the platform in order to retain its premium users. This eventually led to the CEO of Relish to exit the company. In fact, in 2025, Zepto saw several key level exits, including Chandresh Dedhia, who left as VP and head of IT, Apoorv Pandey, who was senior vice-president of strategy, Zepto Cafe CXO Shashank Sharma, and Relish CEO Chandan Rungta.

The only silver lining in this troubled time was Zepto’s success in reducing its monthly burn to around INR 100 Cr, making a dramatic improvement from earlier in the year. 

Hitting Reset Before The Next Climb

With the burn significantly reduced and some dark stores reaching profitability, Zepto finally managed to raise $450 Mn from new investors, primarily the California Public Employees’ Retirement System (CalPERS). It valued the company at $7 Bn, which was a 40% jump from the previous year’s valuation, and brought Zepto’s total cash reserves close to $900 Mn. 

Zepto immediately returned to the expansion mode. It moved quickly to fix the dark-pattern issues and revamped its app interface to increase transparency.

But the more dramatic shift came in the form of renewed spending. To win back users, Zepto removed handling fees, surge fees, and several ancillary charges. This reportedly pushed its monthly burn back into the INR 200-300 Cr range. The startup also launched revenue streams like Super Mall and Zepto Pharmacy that are designed to diversify its topline beyond groceries.

In Palicha’s own words, the startup is now adding “a few hundreds” of dark stores, marking a fresh expansion cycle.

Making A Fresh Bid To List 

With the rhythm slowly returning and cash position looking up, Zepto has decided to make a fresh push to the securities market and file the draft papers through the confidential route by the end of December. The startup is aiming to raise $450-500 Mn, including an offer-for-sale component, and is targeting a listing window during July to September 2026. This gives Zepto roughly two quarters to rework its unit economics, correct reputational damage, and regain the market share.

Analysts, however, remain cautious. “You can’t be number three in the market for an IPO. You must reclaim the No 2 slot,” Datum Intelligence founder Satish Meena said. While the debate around ranking varies depending on whether one looks at revenue, GOV or order volume, the competitive pressure is undeniable. 

Zepto’s revenue stood at iNR 11,110 Cr in FY25, compared to Blinkit’s GOV of INR 28,274 Cr, and Instamart’s topline of INR 14,600 Cr. It needs to be highlighted that unlike the two rivals, Zepto’s revenue accounting does not represent direct sales in the same way as Blinkit’s or Instamart’s. 

Even if Zepto were at the second spot, Swiggy Instamart would have been breathing down its neck. With Swiggy raising INR 10,000 Cr from QIP, and shifting deeper into an inventory-led mode, it could widen the gap with Zepto just as Blinkit did earlier. Swiggy had also borrowed a page from Zepto’s playbook by offering zero delivery fees, handling charges, or surge fees above a minimum order threshold of INR 299. The move may further erode Zepto’s user acquisition edge.

Most analysts see the recent $450 Mn funding round as a preparatory step – a way to firm up the balance sheet, bring back confidence, and rebuild the narrative ahead of a listing. The immediate challenge, however, is that Zepto’s renewed growth push is once again inflating the losses at precisely the moment when public-market investors are demanding financial discipline. With listed peers Eternal, which controls both Zomato and Blinkit, narrowing losses and improving contribution margins, an IPO built around high burn rate may not find easy acceptance. 

Reliance’s entry into the quick commerce space has added to the pressure on Zepto. JioMart is in the process of adding 400 dark stores and pushing deeper. For Zepto, squeezed from both sides by Blinkit and Instamart, Reliance’s entry could reshape the competitive landscape entirely. 

The next six to nine months will therefore be the most consequential phase in Zepto’s journey. The startup is attempting to scale, fix economics, restore trust, and prepare for a listing, all while fighting well-funded competitors.

Edited By Kumar Chatterjee