Zepto Doubled Its Revenue. So Why Did Its IPO Get Paused?

Revenue doubled, margins improved, and the loss still grew to ₹5,905 crore. Here's what institutional investors saw that private backers didn't.

Reviewed by BuyUnlistedShares Research Desk.

In October 2025, private investors valued Zepto at $7 billion. Nine months later, India's largest mutual funds indicated the company was worth closer to $2.5–3 billion — despite revenue more than doubling in between and margins improving on almost every line. The IPO that was expected to follow didn't happen, at least not yet. Here's a factual look at what changed, drawn from Zepto's FY26 financial disclosures, without any buy or sell suggestion attached.

The Headline Numbers

More Than Just Grocery Delivery

Zepto is often thought of as a single delivery app, but it actually runs four distinct revenue lines – and the one most people associate with the brand, grocery sales, grew the slowest:

Where the ₹5,905 Crore Loss Comes From

Breaking down every ₹100 of revenue shows where the money actually goes:

● Buying the groceries: ₹80.4, leaving a gross margin of ₹19.6.

● Delivering it: ₹13.5

● Storing it in a dark store: ₹9.5

● Paying employees: ₹7.9

● Marketing: ₹6.1

● Depreciation, interest & other costs: ₹8.7

● Net loss: ₹26.1

The core issue: Zepto keeps about ₹19.60 in gross margin per ₹100 sold, but spends roughly ₹23 just delivering and storing that order — before a single salary or ad expense is counted. That said, this gap is narrowing quickly: it stood at 12.7% of revenue in FY25 and fell to just 3.4% in FY26, even as revenue doubled and marketing spend rose only 17%. Zepto also carries zero borrowings.

How Advertising Became Profitable

The most notable shift in FY26: for the first time, Zepto earned more from advertising than it spent running that business.

Advertising economics look nothing like grocery economics. Selling a product involves trucks, riders, and cold storage; selling a brand a spot at the top of search results costs Zepto almost nothing beyond the app it already runs. Ad revenue is only about 7.2% of the total, but it disproportionately supports the bottom line — remove it, and FY26's loss would have been closer to ₹7,400 crore.

● Limited shelf space: a dark store carries a few thousand products versus tens of thousands in a supermarket, making visibility far more valuable to brands.

● Sharper targeting: Zepto can see an individual customer's actual buying history, not just a broad demographic.

● Immediate purchase: the ad and the sale happen within the same short session, rather than relying on brand recall later.

● Harder to compete away: rivals can match a price discount, but they can't replicate another platform's own search placement.

Why the IPO Got Paused

Two clarifications matter here: the IPO wasn't withdrawn — the filing remains active with regulators, with a window until around November 2027 — and the pause wasn't triggered by weak operating performance. The company handled roughly 640 million orders in FY26, crossing 2.3 million orders a day by the March quarter across about 1,139 dark stores.

The gap comes down to who is setting the price. A private funding round is negotiated among parties who mostly benefit from a higher number — founders, existing investors marking up their own holdings, and an incoming investor buying into the story. An IPO instead asks a broad set of public-market buyers, with no stake in the existing valuation, what they think the business is actually worth today.

On that question, the company's cash position adds useful context:

That works out to a little over a year of runway at the current burn rate — not an urgent shortfall, but not a position that favours dictating price to public-market investors either. Zepto isn't alone in facing this kind of valuation reset: several other well-known Indian consumer-tech companies have also deferred IPO timelines or listed well below their last private valuation in the same period.

Frequently Asked Questions

1. How much did Zepto lose in FY26?

Zepto reported a consolidated loss of ₹5,905 crore in FY26, up from ₹4,700 crore in FY25 — even as revenue more than doubled over the same period.

2. How fast did Zepto's revenue grow?

Total revenue rose from ₹11,110 crore in FY25 to ₹22,624 crore in FY26, a growth of about 104%. Advertising and platform services grew even faster than the core grocery business.

3. Why does Zepto lose money on grocery delivery?

For every ₹100 of goods sold, Zepto keeps about ₹19.60 as gross margin — but spends roughly ₹23 on storing and delivering that order. The delivery model costs more than the product margin it's built on, before any other expense is even counted.

4. Is Zepto's loss getting better or worse?

Better, on a percentage basis. The gap between gross margin and delivery-plus-storage cost narrowed from about 12.7% of revenue in FY25 to 3.4% in FY26, and EBITDA margin improved from around −41% to −23%.

5. Has Zepto's advertising business become profitable?

Yes, for the first time in FY26. Ad revenue of ₹1,636 crore exceeded ad-related spend of ₹1,389 crore, a net positive of about ₹247 crore — reversing a net loss of ₹536 crore the year before.

6. Why is advertising more profitable than grocery sales for Zepto?

Selling ad placements to brands costs almost nothing to fulfil — no delivery, no cold chain, no warehousing — while grocery sales carry high fulfilment costs. A limited number of product slots in a small dark store also makes visibility more valuable to brands than it would be in a large supermarket.

7. Did Zepto's IPO get cancelled?

No. As of the latest update, Zepto's draft IPO paperwork remains active with regulators, and the company has said it is pausing the process for one to two quarters rather than withdrawing it entirely.

8. Why did Zepto's IPO get paused instead of proceeding?

Institutional investors reportedly indicated interest at a valuation of roughly $2.5–3 billion, well below the $7 billion valuation set in a private funding round in October 2025 — a gap the company opted to wait out rather than accept.

9. How much cash runway does Zepto have?

As of March 2026, Zepto held about ₹4,770 crore in cash and liquid investments against roughly ₹3,462 crore burned on operations during FY26 — implying well over a year of runway at that burn rate.

10. Is this blog a recommendation to invest in Zepto?

No. This article summarises publicly available financial disclosures for general informational purposes only. It is not investment, financial, or legal advice and is not a recommendation to buy, sell, or hold any security. Unlisted shares carry risks, including illiquidity and valuation uncertainty — readers should do their own research or consult a registered advisor.

Disclaimer:

This is written for educational and informational purposes only. Nothing here constitutes investment advice or a recommendation to buy or sell securities. All data is sourced from publicly available information. Investments in securities markets are subject to market risks — please read all offer documents carefully before investing