Zepto files $1 billion IPO as advertising revenue surges amid widening losses
Zepto’s draft prospectus reveals a 151% jump in advertising income, yet the company reported a net loss of ₹59.1 billion in fiscal 2026. Early investors including Y Combinator-affiliated funds are retaining stakes rather than selling.
Indian quick-commerce startup Zepto has filed for an initial public offering with a potential valuation of approximately $1 billion, marking a significant milestone for one of the country’s most closely watched technology firms. The filing, released by TechCrunch, outlines the company’s financial trajectory as it seeks to transition from a venture-backed entity to a publicly traded company, aiming to raise up to ₹80.1 billion through a fresh issue of shares.
The prospectus highlights a structural shift in the company’s revenue model, with advertising income surging 151% year-on-year to ₹16.4 billion in fiscal 2026. This growth significantly outpaced operating revenue, which increased by 104% to ₹115.5 billion. While grocery deliveries remain the core business, the rapid expansion of the advertising arm mirrors strategies employed by global e-commerce giants to monetise merchant visibility.
Despite processing over 640 million orders and expanding its network to 1,139 stores, Zepto continues to operate at a loss. The company reported a net loss of ₹59.1 billion for fiscal 2026, an increase from ₹47.0 billion in the previous year. The filing acknowledges that the startup may continue to incur losses and might not be able to sustain its historical growth rates, underscoring the challenges of scaling in a fiercely contested market.
Investor participation in the offer-for-sale of up to 113.5 million shares has been mixed. While some existing investors are selling, prominent early backers including Y Combinator-affiliated funds, Lightspeed, StepStone, Lachy Groom, and Glade Brook are not participating, opting to retain their stakes. This decision comes as the company’s public-market valuation remains uncertain, with some institutional investors reportedly indicating valuations well below its last private round of $7 billion.
Regulatory scrutiny also features prominently in the filing. Zepto disclosed that founders Aadit Palicha and Kaivalya Vohra received summonses from India’s Enforcement Directorate in April regarding foreign investment regulations and shareholding structures. The founders have provided requested information, but the company cautioned that future inquiries or penalties cannot be ruled out. The listing follows Zepto’s relocation of its legal home from Singapore to India, aligning with a broader trend of tech startups restructuring for domestic market access.
