Zepto seeks to slash monthly cash burn, which outpaces that of peers, as it readies for $750 million IPO

The platform wants to scale down the cash reserves it utilizes to cover operating expenses to $10-20 million ( ₹88.5 crore- ₹177 crore) a month even as it cuts marketing expenditure and staff costs to narrow losses, the people said.

Estimates of Zepto’s monthly cash burn vary. The cash burn was $80 million ( ₹708 crore) in August, according to two employees. However, a company spokesperson said after this story was first published that this figure was "substantially off," declining to specify the amount. A top company official, who asked not to be identified, said the cash burn was in the range of ₹350-400 crore.

Swiggy’s cash burn for both its food delivery business and quick commerce together was ₹1,341 crore in Q1 of FY26 and decreased to ₹749 crore in Q2, as per the company's financials.

Blinkit's burn rate was ₹35 crore a month, according to Deepinder Goyal, managing director and chief executive officer (CEO) of Eternal, its parent company. Blinkit's adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) loss declined to ₹156 crore in Q2FY26 from a loss of ₹162 crore in Q1FY26.

As per publicly available data quoted by CEO Aadit Palicha, Zepto has about $900 million in cash reserves.

Analysts said that headline burn rates, especially in quick commerce and at Zepto, don’t by themselves describe the health of the business, and retail investors shouldn’t treat them as a proxy for success or failure.

“Burn reflects how aggressively a company is investing to grow hiring, operations, marketing, and not whether the model is broken," said Devendra Agrawal of Dexter Capital Advisors. “But after all the money is spent, if the contribution margins or gross margins continue to remain negative, that would be worrying. On the other hand, if contribution margins are healthy, then a higher burn is a strategy choice that wouldn’t hurt the business in the long term."

Zepto is preparing for a $750 million IPO through a fresh issue, alongside an offer for sale of $50 million, one person said. The company plans to file draft documents for the share sale via the confidential route within the next 20 days, according to two people.

If the IPO goes through, it will mark one of the shortest journeys from launch to listing in India’s consumer internet market. Zepto started in July 2021 as a rival to Swiggy’s Instamart, which started in August 2020, Zomato’s Blinkit (which began as Grofers in 2013) and BigBasket (2011).

Funding rounds

Founded by Palicha and Kaivalya Vohra, Zepto has raised large rounds of funding as it spent aggressively to build market share against Blinkit and Instamart. Most recently, the company raised $450 million at a $7 billion valuation, led by the California Public Employees’ Retirement System.

The second person said Zepto had initially sought about $1 billion in equity in its last fundraise, but the board and investors approved only $450 million.

“Internally, Palicha asked senior business executives and vertical heads to prepare for a listing in the January-March quarter and slashed marketing and advertising spends," the person added. “There were layoffs in recent months as well, which significantly reduced the burn rate to move towards Ebitda profitability."

The Mumbai-based startup raised $350 million in November 2024 in a round led by Motilal Oswal Private Wealth—its third capital raise in six months that year. It followed a $340 million follow-on in August 2024 led by General Catalyst, which took its valuation to $5 billion. In June 2024, Zepto secured $665 million in a pre-IPO round at a valuation of $3.6 billion.

Palicha recently told the media that the platform processes about 2 million orders daily, the highest in the company’s history. In the run-up to Diwali, Zepto recorded 2.1 million orders on 18 October, 2.37 million on 19 October and 2.13 million on 20 October, he told Moneycontrol in a recent interview.

As per publicly available numbers for March 2025, Eternal-owned Blinkit delivered about 1.65-1.75 million orders a day, ahead of Zepto’s 1.45-1.55 million orders a day. Instamart was third at about 1.05-1.15 million orders a day in March.

Zepto reported about ₹11,110 crore revenue from operations in FY25, according to startup news platform Entrackr. This is up almost 150% from ₹4,454 crore in FY24. Profit and loss details for FY25 are not yet available.

Expansion plans

However, as per the latest publicly available numbers, the company remained lossmaking in FY24, with its net loss narrowing to ₹1,249 crore from ₹1,272 crore a year earlier.

Ebitda is a measure of operating performance that strips out financing costs, tax effects and non-cash charges to show core profitability from regular operations.

On expansion, the company plans to go deeper into the top metro markets where it operates and has no near-term plans to enter smaller towns, the two people said.

“Zepto is targeting at least 80-85% pin code serviceability in all large cities where it operates," the second person said.

The first person said the platform averages about 1,300 orders per store per day and aims to reach 1,800-1,900 daily orders per store.

“The company has recently cut delivery and extra fees, enabled by a lower burn rate over the past two months and other cost savings, which are being passed on to consumers," the person added.

In dark-store capacity, publicly available figures indicate that Blinkit leads with more than 1,800 dark stores across India, followed by Instamart with over 1,100, the first person said. Zepto operates more than 1,000 dark stores, said the first person.

India’s quick-commerce sector has surpassed $10 billion in gross merchandise value (GMV), with 30 million monthly transacting users and a 15% share of the total e-commerce GMV. It has grown at 150% year-over-year in the first five months of 2025, driven by the rapid expansion of dark stores, according to estimates by Redseer Strategy Consultants.

(This story was updated with comments from a Zepto spokesperson, a top company executive and an analyst.)