Zepto Raises ₹1,000 Cr, Shifts to Profit
Zepto is raising a ₹1,000 Cr round after delaying its IPO, shifting strategy from discount-driven growth to customer retention.
Quick commerce startup Zepto is raising a ₹1,000 Cr funding round after deferring its planned $1.2-1.3 Bn IPO. The company, which reported a consolidated net loss of ₹5,905 Cr on revenue of ₹22,623.6 Cr in FY26, is shifting its strategy from aggressive discounting to focus on customer retention and profitability. You can see how its financials compare to rivals in our detailed stats section.
Speculation around the IPO delay centered on valuation concerns. Reports suggested major mutual funds felt Zepto's $7 Bn private market valuation was unjustifiable compared to trading multiples for rivals Eternal and Swiggy, the parent companies of Blinkit and Instamart. Zepto's losses are significantly higher than those competitors. The company, however, says it remains committed to listing soon and intends to complete the new funding round within the timeframe provided by SEBI, which approved its updated draft prospectus in June 2026.
The Profitability Challenge
Zepto's discount-fueled growth created a bottleneck with institutional investors. Despite averaging 2.33 Mn daily orders from 1,139 dark stores as of March 2026, the company reported the industry's lowest average order value (AOV).
| Platform | Average Order Value (FY26) |
|---|---|
| Zepto | ₹387 |
| Blinkit | ₹665 to 669 |
| Instamart | ₹700 |
The startup also reported a free cash flow deficit of ₹4,330 Cr in FY26. With its current cash reserves and FY26 burn rate, Zepto has a runway of roughly 1.3 years. Compounding the issue, its annual transacting user base declined from 49.54 Mn in December 2025 to 47.97 Mn in March 2026. This strategic pivot is crucial for its future standings in the competitive quick commerce market.
A Strategic Pivot
In response, Zepto has pulled back on discounts and paused aggressive dark store expansion in metros. The new goal is profitability per order and per store. An operations head at a top rival platform stated that Zepto introduced free delivery on orders above ₹99, removing surge and handling charges, which almost forced the industry to revive its discount strategy by November 2025.
This practice is now on the wane for Zepto. The company has raised its minimum order value for free delivery twice, moving from ₹99 to ₹149, and now to ₹199 during normal hours, rising to ₹299 during peak demand. This brings it in line with Blinkit and Instamart. Kotak Institutional Equities interpreted the move as an attempt to reduce quarterly burn, though analysts also note the risk of losing small-ticket orders to newer platforms with lower thresholds.
Curbing the Discount Culture
The tension is also playing out in discounting. Zepto's aggressive discounts were part of a fight for market share against Flipkart Minutes and Amazon Now. However, insiders say unit economics became difficult to manage. A Zepto supply chain manager said the problem is that the customer is not merely being acquired at a discount, but more or less wants this incentive for every subsequent order.
This led users to break orders into multiple deliveries, increasing fleet utilization without improving economics. Industry analysts now expect moderation. A Bernstein Research report from August 2026 stated discounts on Zepto have fallen from 18-20% of product MRP at IPO filing to roughly 14-16% now. The platform-led discounts are going to slow down further, Bernstein says, with focus shifting heavily towards retaining existing customers through improved services.
The Zepto Club Initiative
Discounts have shifted from the overall customer base to loyal users via Zepto Club, an invite-only paid membership program launched in July 2026 at ₹99 per month. Members receive 5% cashback, redeemable Zepto coins, priority service, and exclusive discounts. The program replicates models like Amazon Prime and Swiggy One, though Eternal has stayed away from a similar program for Blinkit.
Sources inside Zepto said the subscription is a priority for leadership because fees directly improve EBITDA, an area where the company has struggled. The appeal will also come from faster deliveries, service bundling offers, SKU assortments, and potentially early access to premium products.
