After a turbulent year of delays, restructuring, and shrinking market share, Zepto is trying to reboot operations and regain investor trust with a renewed push toward IPO in 2026.
A Broken Cycle: Zepto’s Funding Rhythm Stalls
For much of its history, Zepto operated in high-speed cycles—raising capital, expanding aggressively, fixing unit economics, and then raising again. This strategy helped Zepto climb to the No. 3 spot in India’s $40 Bn quick commerce market, trailing Swiggy Instamart and Zomato-owned Blinkit.
But 2025 broke that rhythm. After raising only $450 Mn—a sharp drop from $1.3 Bn in 2024—Zepto’s hyper-growth model buckled under pressure, forcing IPO delays, product rollbacks, and massive layoffs.
“There’s enough room for us to revive and regain momentum,” said cofounder Aadit Palicha, staying optimistic despite deepening financial woes.
What Derailed Zepto’s IPO Plans?
Zepto planned to file its Draft Red Herring Prospectus (DRHP) between April and June 2025, timing it with peak Q4 revenue. But its own expansion proved unsustainable:
- 110 dark stores were added in rapid succession
- Monthly burn rates soared to INR 660 Cr in January and INR 450–480 Cr in February–March
- Gross Order Value (GOV) rose from $3 Bn in December to $4 Bn in April, but at high cost
Meanwhile, rivals Blinkit and Instamart accelerated expansion using fresh capital. Blinkit, backed by Zomato’s $1 Bn QIP, and Instamart, armed with Swiggy’s IPO proceeds, surged past Zepto in store count, order volume, and brand visibility.
Unable to compete with their financial firepower, Zepto delayed its IPO to the second half of 2026.
A Year of Setbacks: Cafe Shutdowns, Layoffs, and User Backlash
Once IPO ambitions were shelved, Zepto’s cost-cutting began:
- Zepto Cafe, once a flagship offering, was scaled down.
→ 200 outlets temporarily shut down
→ Staff shortages and demand dips plagued operations - Organizational exits included several CXOs, including the Relish brand CEO, Cafe head, IT head, and others
- 500+ employees were laid off across functions
- Dark store expansion was halted as rivals surged ahead
The most damaging blow came from regulatory scrutiny over alleged dark patterns—including hidden delivery charges, surge pricing, and opaque fees. Customer trust eroded. Monthly active users fell to 4.9 Mn, while Blinkit surged to 6.2 Mn.
Desperate Measures: Raising Capital Amid Decline
In a bid to extend runway and calm investors, Zepto made dramatic shifts:
- Increased commission fees from brands
- Slashed discounts for users
- Delayed vendor payments to preserve cash
- Brought back Licious to offset negative feedback from its own brand, Relish
Despite setbacks, Zepto managed to raise $450 Mn from CalPERS, pushing its valuation to $7 Bn—a 40% jump from the previous year.
This fresh cash war chest of nearly $900 Mn enabled a return to expansion mode, and a reset on pricing and transparency.
Back on Offense: Expansion, New Verticals & Fresh IPO Push
Zepto dropped handling and surge fees, revamped its app interface, and re-entered expansion mode:
- Burn rate rose again to INR 200–300 Cr/month
- Launched Super Mall and Zepto Pharmacy to diversify beyond groceries
- Accelerated dark store additions and new hiring
With momentum slowly returning, Zepto has now decided to file DRHP confidentially by December 2025, targeting an IPO between July–September 2026.
The company plans to raise $450–500 Mn, including a secondary sale.
Challenges Ahead: Competition, Profit Pressure & Market Confidence
Despite renewed growth, Zepto’s path to IPO remains risky:
- Its FY25 revenue stood at INR 11,110 Cr, far behind Blinkit’s INR 28,274 Cr GOV and Instamart’s INR 14,600 Cr topline
- Swiggy and Blinkit are closing in on profitability, while Zepto continues to bleed cash
- Public market investors are now demanding clearer paths to profitability, not just growth
- Reliance’s JioMart is entering the space with plans for 400 dark stores, further tightening the competitive squeeze
“You can’t be number three for an IPO. You must reclaim the No. 2 slot,” said Datum Intelligence’s Satish Meena, capturing the urgency of Zepto’s situation.
Final Lap: The Stakes for 2026
Zepto’s last year was marked by retreats, restructuring, and rebuilding. Now, it must prove it can scale responsibly, regain market trust, and offer investors a credible path to long-term sustainability.
The next 6–9 months will define Zepto’s fate. Either it will rise as a resilient IPO candidate, or fall deeper into the shadows of stronger, better-capitalized rivals.
