In its bold bid to dominate India’s quick-commerce race, Zepto is entering a critical phase—one marked by aggressive cost-cutting, operational shifts, and internal upheaval. After spending months burning capital to fuel rapid expansion, the $5 billion Bengaluru-based unicorn is now under pressure to pivot toward sustainability. But as the company reins in cash burn and revises partner terms, it risks alienating key stakeholders in an industry where competition is only getting more cutthroat.
Credits: The Economic Times
From Breakneck Growth to Burn Management
Zepto raised a staggering $1.3 billion in 2024, becoming one of the most watched players in quick commerce. But by March 2025, the company had already spent $500 million, with monthly EBITDA losses peaking at ₹660 crore in January. As of May, Zepto’s monthly burn stands at ₹280 crore—with internal goals to bring it down to ₹100 crore.
To get there, Zepto has slashed user discounts, reined in marketing spends (from ₹150 crore in January to ₹10 crore in April), and paused its aggressive dark store expansion. Meanwhile, it has increased brand commissions and extended vendor payment cycles to 45 days—a move that has angered many partners.
“We aren’t receiving new purchase orders unless we agree to Zepto’s revised terms,” a brand executive told The Arc. Some brands are now eyeing exclusive partnerships with rivals like Blinkit or Swiggy Instamart instead.
Vendor and Rider Backlash Brews
In the quest to tighten margins, Zepto has also cut commissions for third-party logistics providers and slashed rider payouts—just as the sector faces a delivery personnel crunch. Founders of logistics firms say the new performance-linked payout model is unsustainable.
“The timing is odd because there’s excess demand and low rider supply. This wasn’t about customer experience—it’s about margins,” a logistics business owner noted.
Riders and vendors aren’t the only ones frustrated. Brands operating on a ‘sale or return’ (SOR) basis have reported inventory mismatches as high as 40% with Zepto—far worse than Blinkit’s 5% or Swiggy’s 20%. “We had no clarity on what stock they had or when unsold goods would be returned,” said a founder of a home goods brand that recently ended its partnership with Zepto.
Revenue Miss, IPO Delay, and a New Funding Push
While Zepto reported a promising ₹2,400 crore gross order value (GOV) projection for May, the company failed to meet its Q4 FY25 revenue target—its first such miss in four years. This shortfall has delayed its confidential IPO filing, originally planned for March.
Instead, the company is now eyeing a fresh private round of $400–600 million, with talks expected to begin soon. Sources indicate a target valuation of $7 billion. A secondary sale of $300–350 million to Indian investors is also on the table to increase domestic ownership above 50%—a regulatory prerequisite for IPO eligibility.
CEO Aadit Palicha remains publicly confident. In an April 9 post, he claimed the company’s annualised GOV had surged 300% YoY to $4 billion. He also announced that most dark stores will turn EBITDA-positive in the next quarter, with overall profitability in sight by FY26.
Under Fire and Under Pressure
Amid these shifts, Palicha recently accused the CFO of a rival firm—believed to be from Blinkit or Swiggy—of orchestrating a smear campaign using bots and fake investor presentations. “We have cash reserves of ₹7,445 crore and expect to be near break-even soon,” he asserted.
Still, the road ahead is anything but easy. Blinkit and Instamart opened a combined 600+ dark stores in Q4 FY25, and Flipkart Minutes and Amazon Now are scaling rapidly. Flipkart plans to hit 800 stores ahead of its Big Billion Days, while BigBasket targets 700 stores by July.
Credits: LinkedIn
The Stakes Couldn’t Be Higher
Zepto’s growing pains reflect a broader reckoning for quick-commerce players: Can hyper-growth be reconciled with fiscal discipline? Zepto may be learning the hard way that in this market, profitability cannot come at the cost of ecosystem trust. Whether Palicha can strike the right balance will determine if Zepto becomes a long-term category leader—or a cautionary tale.
