Daybreak - Zepto beat Instamart. It still couldn't beat the market

Episode Date: August 4, 2026

Zepto nearly doubled its revenue in a year, processes more orders than Swiggy Instamart, and has raised over 2.5 billion dollars from private investors. But when it filed to go public, India's largest mutual funds said they'd value it at less than half of what private investors had in it's last fundraise.The IPO is now delayed by two quarters. The cash reserves are falling. And six players are competing in a quick commerce market that analysts say can only sustain a few.Zepto's growth story has always worked in its favour but the public market is asking different questions.Read Suprita's stories here:Zepto wants Rs 8,100 crore—and investors to trust the numbers it won’t discloseZepto to recruits from rivals: We give you ‘generational wealth’, you give us long hoursDaybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

For a company that just turned six years old, Zepto has been making some big promises for a while now. For example, Adid Palichra, one of the founders and CEO, publicly stated in 2024 that he saw a clear path to an IPO listing in 2025. In the same year, he also said that he sees Zepto becoming bigger than Demart, a 24-year-old $30 billion company. In fact, the company has even promised its employees' generational wealth through its ESOPs when it finally listed. My colleague Supritanupam wrote about this a year ago. I'll link it in the show notes for you. Now, despite its high cash burn, high growth approach, Zepto has always been the quick commerce poster child for private investors. In just five years, Zepto has raised more than 2.5 billion.

billion dollars. Just its last fundraise in October 2025 was a whopping $450 million. And that immediately set the company's valuation soaring to $7 billion. In that same amount of time, five years, Zepto had also increased its revenue consistently and had beaten out one of its major competitors, Swiggy's Instamart, in both order volumes and market share. The company's updated DRHP or draft red herring prospectus from early this June showed that the company had nearly doubled its revenue from about 11,000 crore rupees in FI25 to more than 22,500 crore rupees in FI 26. Even the company's total income was impressive. At more than $2.4 billion in FY26, the pure play quick commerce startup was quite close to Swiggy's total income during the same

period, with the food delivery giant's number sitting at almost $2.5 billion. And like I mentioned earlier, it also managed to beat Instamart's order volumes in FY25. Zepto processed more than 340 million orders compared to Instamart's roughly 270 million orders. The gap widened again the next year with Zepto processing roughly 200 million orders more than Instamart. So despite its widening losses, Zepto's growth story has always worked in its favour, and the numbers have backed it up. The next natural step was to take the company public and become the youngest quick commerce player to list. So it filed its updated DRHP in early June.

And then last Thursday, Money Control reported that one of the largest mutual funds in the country had called Zepto to say that it would not be participating in the listing. Days later, Palichar told his employees that the company was delaying its listing by another couple quarters. You see, even though nothing has really changed within Zepto itself, the market around it has shifted. Mutual funds that represent retail investors have already been dealing with a stress market with growing geopolitical tensions.

And with increasing competition in the quickcom. space, public investors are not quite convinced just by Zepto's idealism and numbers. Let's find out why. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Treeti River Geese, and every day of the week, my co-host, Nikola Sharma and I will bring you one news today that is worth understanding and worth your time. Today is Wednesday, the 5th of August. When asked what they thought Zepto was worth, the mutual funds reportedly said $2.5 to $3 billion.

That's less than half of what private investors had last valued Zepto at in October 2025. But the conservative lens that the mutual funds were using makes more sense when you look at what the public markets have looked like recently. Firstly, India's 2026 IPO season is already off to a rough start. Bloomberg reported on Monday that proceeds have been down by about 20% year on year. So far, companies have only been. raised close to $6 billion through public offerings in 26. This is after record years of fundraising,

more than $22 billion raised in 2025 and $20 billion plus dollars in 2024. Companies that were preparing to list across sectors are accepting lower valuations reducing their deal sizes or delaying their listings. These include companies that have been followed closely by analysts and investors for months now. For example, Manipal has,

health enterprises, the company behind the Manipal chain of clinics and Juniper Green Energy, a successful renewable energy company, have cut the size of their offerings just to get their deals done. Zepto, as we know, has deferred its listing and so has phone pay, the payment app owned by Walmart. Other Indian IPOs also showed similar signs of decline. Helmet accessories companies Studs and Orkla India, the conglomerate that owns brands like MTR and Rossoe Magic. saw a lot of excitement initially.

Their shares were even 50 to 70 times oversubscribed. But when they actually listed, both stocks traded at prices below what they were sold at. Even popular household name companies like Lenskart, Grow and Pine Labs saw their informal listings lose steam among investors. Basically, across a bunch of unrelated companies, even though investors showed excitement initially, once real money was on the table, they were getting cold feet. What's happening is that the market is weakening, largely due to the trade wars that have put a strain on it.

And as a result, foreign investment has reduced and local institutions are becoming the dominant buyers. Srinat Sridharin, a policy researcher and corporate advisor, told business standard that they are more pragmatic about valuations because they are ultimately stewards of retail investors' capital. They are favouring businesses that demonstrate resilience and a credible path to profitability over narratives built on growth alone. The consequence is that lofty private market valuations and business models with uncertain long-term economics

are now facing a far more demanding public market reality. And even when we take a narrower look at the quick commerce market, the skepticism carries. For example, analysts from Goldman Sachs believe that market leader Blinket is going to see a growth deceleration. You see, Blinkett's net order value has been growing at a rate of 100% year-on-year for the last six quarters. Still, analysts think that the growth is unlikely to sustain beyond the next two or three quarters. This is mainly because of the fact that the growth alone that we already see is owed to what is called a base. effect. What that means is it's easy for companies to double their growth when they are starting from scratch in a whole new category with little competition or penetration. Akash Agraval, the head

of digital and new age business at Anansrati Investment Banking, told business today a couple months ago that quick commerce as a segment is simply maturing. It's pretty much already saturated its core affluent urban markets and so the breakneck growth rates that we were seeing so far are bound to cool off. The thing is, Zepto's liquid reserves are also depleting fast. In another story for the Ken, Supritz reported that the company's cash and cash equivalence dropped 23% to almost 6,000 crore rupees in FI26 from 7,000 crore plus just a year before. So if investors are aware that the quick commerce market growth is set to slow, at least relatively, it makes sense that they would want to back the profitable horses that they have already bet on,

like Zomato and Swicky. But as it turns out, they were actually hesitant to even use those companies as benchmarks to put Zepto up against. More on this in the next segment. You know, every time I try to buy something like, say, a diet coke on quick commerce apps, it's always in this order. Blink it first, then if I don't get it there, then Zepto, and, Finally, Instamart. Most Indians living in urban India have their own order for this.

And that's just how we tend to think about the big three quick commerce companies. It's always a trifecta of Blinkets, Swiggy and Zepto. So why did some of the country's biggest mutual funds, like SBIMF, ICICI Prudential, Kotuk and HDFC, refused to compare Zepto with the other two? Well, they were skeptical about using Zomato and Swigi as a benchmark mainly because both of them had successful food delivery businesses when they listed and continue to have them. Considering that quick commerce as a segment demands high cash burn,

having profitable food delivery businesses ensures that losses on the quick commerce side are offset by the profit from the food delivery verticals. And that just looks much better on paper for investors. Also, as Suprat reported in June this year, Zepto had actually chosen not to disclose several key performance indicators like average monthly transacting users and customer acquisition costs. These, by the way, are metrics that both Blinket and Instamart report to their investors every quarter. But a pack of envelope calculation from the same report shows that the cost of acquiring a new customer appears to have more than tripled in a year,

from a little more than 400 rupees in FY25 to about 1,450 rupees in FY206. The investors had also flacked the fact that septo was burning over 900 crore rupees each quarter. At a point, it had even been left with just three quarters of cash. They said that it would be unsustainable for the company to continue to scale at the rate it was going. Though because septo has now reduced its burn to about 700 crore rupees, it reportedly should have enough for the next two quarters, which lines up with its updated listing timeline. Then there's also Zepto's reducing liquidity, which is a bad sign when put in comparison with its competitors.

Blinket has an estimated almost $2 billion in reserve and Swiki about $1.5 billion. And of course, newer entries like Amazon Now and FlipCart Minutes who have up their game more recently have brought with them their deep pockets. In fact, Tech Runt reported in April this year that Flipkart was offering some of the deepest discount in the segment of about 23 to 24% across categories, which means Zepto is in for a real struggle for space in a crowded segment. In fact, an industry executive told business standard that investors know the market is unlikely to sustain all six players over the long term, the six players being Blinket, Zepto, Swiggy, Amazon, Flipkart and Big Basket.

Only a few are likely to emerge as winners. As of now, Zepto's current plan is to raise another 1,000 crore rupees privately from existing shareholders before it tries to list again. And there are some signs. And to its benefit, there are some signs that the company is learning to spend more efficiently. One is a narrowing burn cost I mentioned earlier. That's partly owed to the company deciding to slow down its dark store expansion and partly owed to the company's cost per order coming down. Suprit reported that the digital marketing cost per order fell from around 33 rupees in FY25 to just 4 rupees in FY26 and even further to a single rupee in the three months ended March 26. But still, the odds do seem stacked against Zepto.

Even if it returns with stronger numbers, there's no telling if the market will strengthen in the coming two quarters. All things considered, SEPTO may need to face a fact that, it might very likely have to continue in the intensifying quick commerce fight without the kind of watchest that comes with a public listing. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription offers daily long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the Ken.com and click on the red subscribe button.

button on the top of the Ken website. Today's episode was hosted and produced by my colleague Rachel Vargis and edited by Rajiv Sien.