Zepto Tightens Spending After IPO Delay
Quick commerce startup Zepto is raising delivery fees, cutting discounts, and launching a paid membership program to improve profitability after postponing its IPO.
Zepto has postponed its initial public offering and is now implementing measures to improve its financial health. The quick commerce giant is pulling back on discounts, increasing the minimum order value for free delivery, and pushing a new paid loyalty program.
According to a report from Inc42, Zepto's decision to defer its IPO stemmed from investor concerns over its $7 billion valuation, high cash burn, and an industry-low average order value of ₹387. Compounding these issues, the company's transacting user base shrank by more than 3% quarter-on-quarter to 47.97 million in the fourth quarter of the 2026 fiscal year. Zepto had a free cash flow of ₹4,330 crore at the end of March 2026, which the source states leaves it with just over one year of runway.
Strategic Shifts for Profitability
Financial pressures have prompted a strategic shift away from an aggressive, scale-first approach. The company is now focusing on improving its unit economics ahead of any future public listing.
A key change involves delivery fees. Zepto has raised its free-delivery threshold to ₹199 for normal hours and up to ₹299 during peak periods, a move that aligns its policy with major rivals. The company has also reduced platform-led discounts, which have fallen from 18-20% of the maximum retail price at the time of its IPO filing to 14-16% currently. Further moderation is expected. The goal is to increase the net value of each order, even if it means losing some customers who make very small purchases.
The Premium and Loyalty Push
Alongside cost-cutting, Zepto is launching initiatives aimed at increasing revenue from existing customers. The unicorn recently introduced Zepto Club, a paid membership plan that offers cashback, priority service, and exclusive discounts. This program places incentives behind a paywall, signaling a focus on retaining valuable customers rather than spending heavily to acquire new ones.
Simultaneously, the company is promoting its Zepto Select service, which pushes premium and gourmet grocery items. This effort is designed to increase the average basket size and improve profit margins per order.
The Execution Challenge
Zepto's new strategy represents a significant departure from its previous "everyday low prices" marketing pitch. The company is now betting on subscriptions, premium products, and more disciplined discounting to narrow its losses. The report notes that, unlike rivals Blinkit and Instamart, Zepto does not have the "safety nets" of being part of larger conglomerates, which increases the pressure on the Aadit Palicha-led platform.
The central question is whether Zepto can successfully execute this new plan to achieve profitability while maintaining growth. The company's ability to manage this transition will be critical for its future, especially as it operates with a constrained financial runway.
Other Startup Updates
The Inc42 report also covered several other developments in the Indian startup ecosystem. Food delivery giant Zomato has shut down its customer support operations in Hyderabad, resulting in around 240 layoffs. The company's remaining in-house support team will be consolidated in Gurugram. This follows a round of approximately 600 layoffs across two cities in April of the previous year, which the company attributed to AI-led automation. Separately, Zomato announced a ban on dishes containing analogue dairy products, warning non-compliant restaurants they would be delisted.
In funding news, Purple Style Labs, the parent company of Pernia's Pop Up Shop, saw its ₹680 crore IPO subscribed by only 8% by the end of the first day of bidding. Retail investors subscribed 39% of their quota. In contrast, enterprise cloud company ESDS Software Solution's ₹720 crore IPO was subscribed 18.34 times on its second day, receiving bids for 22.65 crore shares.
The decade-old online grocery startup Satvacart has shut down after failing to secure growth capital. Founded in 2014, the company had pivoted to quick commerce and raised $2 million before deciding to wind up operations.
Alcobev brand Bira91 is facing a fresh insolvency threat. Glass manufacturer Hindusthan National Glass & Industries has served a default notice to the brewer over alleged unpaid dues of ₹11.8 crore related to 51 lakh customised glass bottles.
Electric two-wheeler registrations declined for the second consecutive month in August, falling 16.2% month-on-month to 1.72 lakh units. For detailed performance stats, market leader TVS Motor saw a 17% monthly dip but still led the segment. Bajaj Auto strengthened its position, capturing a 22.5% market share with its 45,861 registrations.
