Zepto's IPO Filing Shows 4.5x Customer Growth and a Profitability Problem Nobody Wants to Name

2026-07-09 — customer acquisition strategy India

I was reading Zepto's updated DRHP filing last week. The numbers made me sit back.

When a company quintuples its customer base in two years, you notice. Annual transacting users went from 10.57 million in FY24 to 47.97 million in FY26. Revenue hit ₹22,623 crore, more than double the ₹11,109 crore from the year before. This is a quick-commerce startup that barely existed outside two cities three years ago.

The mechanism is not mysterious.

Dark stores. Zepto built 1,139 of them across 66 cities. They're planning to add another 1,900 more, and they're spending ₹1,629 crore of IPO money to do it, plus another ₹1,735 crore on leases through FY30. The model is you build the infrastructure first, you get the customers through speed and discounts, and then you hope the math improves as more people order from each location. Every quick-commerce operator is running this bet. Zepto is running it harder than most.

Here's the problem: the losses are running harder too.

Net losses expanded 26% year on year to ₹5,905 crore in FY26, up from ₹4,699 crore in FY25 and ₹1,214 crore in FY24. Revenue doubled. Losses still expanded. When that happens, most consultants get this wrong, including us sometimes. The usual read is that new customers cost more than old ones, and the newer cities haven't matured yet. Maybe. But it might also mean the model needs a density level that doesn't exist in most of the country, something like that.

The investors will have to pick which story they believe in.

The Number That Should Worry You

Buried in page 87 or wherever they put it is something that's getting less attention than it should. Monthly active users dropped sequentially in March 2026. First month-on-month decline since the expansion started. Annual transacting users kept rising because existing customers ordered more often, but the actual number of people opening the app each month went down. For a company whose entire bet depends on a growing pool of urban buyers, that's not catastrophic yet, but it's not nothing either.

This raises a question.

Is the easy customer acquisition in Delhi and Mumbai and Bengaluru already over? Are the next 1,900 dark stores heading into cities where the numbers don't work the same way? Tier-2 and tier-3 cities have lower order values. Lower density. Less willingness to pay the kind of premium that makes quick commerce pencil out. Blinkit reported positive adjusted EBITDA of ₹37 crore in their most recent quarter, actually, that's not quite right—I'm going off public filings that might be dated, but the point is they've been more selective. Zepto's adjusted EBITDA loss for March came in at ₹1,248 crore.

The gap between those two numbers is not small.

None of this makes Zepto a bad business. A company that grew its customer base 4.5 times in two years, that doubled revenue in twelve months, that built a logistics network across 1,139 locations—that company has clearly found something that works. Aadit Palicha and Kaivalya Vohra started this in 2021 while still teenagers and have executed faster than most people in their category. You can't argue with that.

But the IPO market is a different conversation than the venture market. Growth gets you a valuation. Profitability gets you the multiple. Right now, Zepto's filing is strong on the first and genuinely unclear on the second. Investors walking into this listing are betting that dark store density in newer cities will flip the unit economics the way it did in Mumbai and Bengaluru. It's a reasonable bet. It's still a bet though, and as far as I can tell, most people haven't sat with what happens if they're wrong.