The quick commerce startup has reportedly paused its IPO plans over cash burn concerns and is considering a fresh funding round.
Bengaluru: Quick commerce startup Zepto has reportedly put its planned initial public offering (IPO) on hold and is instead preparing to raise more than Rs 1,000 crore through a pre-IPO placement, as the company focuses on improving profitability and addressing investor concerns over cash burn.
According to multiple media reports, the fresh funding would strengthen Zepto’s balance sheet ahead of a future public listing while giving the company additional time to improve its financial performance.
Pre-IPO Round Planned
Under Securities and Exchange Board of India (SEBI) regulations, companies preparing to go public can raise to 20% of their proposed fresh issue through a pre-IPO placement.
However, any amount raised through this route is deducted from the size of the eventual fresh issue in the IPO.
Reports suggest existing investors, including Glade Brook, General Catalyst, Goodwater Capital, and Nexus Venture Partners, could participate in the proposed funding round.
The company has not officially confirmed the fundraising plans.
IPO Size Reportedly Reduced
Zepto confidentially filed its draft IPO papers with SEBI in December 2025, proposing a fresh issue worth approximately Rs 8,010 crore.
The company had originally planned to raise around Rs 8,000 crore, but recent reports indicate the proposed IPO size has been reduced to between Rs 5,000 crore and Rs 6,000 crore.
According to the draft filing, the proceeds were expected to be allocated as follows:
- Around 45% for expanding its dark store network and lease-related expenses.
- Approximately 25% for technology development and marketing.
- The remaining 30% for acquisitions and general corporate purposes.
Zepto’s IPO had previously been expected around July 2026, although no revised timeline has been announced.
Valuation Expectations Have Moderated
The company’s valuation expectations have also reportedly declined.
Domestic mutual funds assessing the proposed pre-IPO round, including SBI Mutual Fund, ICICI Prudential Mutual Fund, Kotak Mutual Fund, and HDFC Mutual Fund, are said to be valuing Zepto at between $2.5 billion and $3 billion on a post-money basis.
Some estimates place the valuation as high as $4.5 billion, although even that would remain significantly below the $7 billion valuation at which Zepto raised $450 million in October 2025.
The lower valuation reflects a more cautious investment environment and increasing focus on profitability across India’s startup ecosystem.
Investors Focus on Cash Burn
One of the biggest concerns raised by prospective investors is Zepto’s spending.
According to reports, the company was previously burning more than Rs 900 crore per quarter, giving it only a limited cash runway.
That quarterly cash burn has reportedly been reduced to around Rs 700 crore, extending its available funding while management works toward improving operating efficiency.
The additional capital is expected to provide greater financial flexibility before the company revisits its IPO plans.
Growth Remains Strong
Founded in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto has rapidly become one of India’s largest quick commerce companies through a dense network of dark stores that promise grocery deliveries within minutes.
Despite slowing IPO plans, the business continues to report strong operating metrics.
According to a recent report by brokerage Emkay Global, Zepto is India’s second-largest quick commerce platform by net order value.
During FY26, its net order value exceeded Swiggy Instamart’s by 13%, although it remained 53% lower than Blinkit’s.
The company also recorded the industry’s highest order density, averaging 2,117 daily orders per store during the fourth quarter of FY26.
By comparison:
- Zepto: 2,117 orders per store per day.
- Blinkit: 1,425 orders.
- Swiggy Instamart: 1,098 orders.
Profitability Remains the Challenge
While Zepto has demonstrated strong customer adoption and operational scale, profitability remains its biggest hurdle.
Emkay Global noted that Zepto’s aggressive pricing strategy and low minimum order values have helped attract customers quickly but have also weighed on margins.
The brokerage warned that increasing average order values to improve profitability could potentially slow customer growth.
Among India’s major quick commerce companies, Zepto also reported the largest operating losses.
Its adjusted EBITDA loss reached approximately Rs 5,360 crore during FY26, compared with Rs 3,510 crore for Swiggy and Rs 280 crore for Blinkit.
The reported decision to delay its IPO suggests Zepto is prioritising stronger financial performance before entering the public markets, with the aim of achieving a higher valuation once profitability improves.
Source: ISN
