Zepto: Complete Business Model Analysis

Zepto: Complete Business Model Analysis

Zepto is planning to raise $350 million at an estimated $7 billion valuation, just seven months after raising $340 million at a $5 billion valuation. Why is Zepto frequently raising funding, even after accumulating $1.95 billion since its inception, according to Tracxn? Why is the company still not at break-even?

Analysing Zepto's Competitive Advantage: A Business Model Comparison with Swiggy, Instamart, and Blinkit

Public sentiment is turning negative for Zepto. Reddit can make or break a startup. In 2019, BYJU’S and WhiteHat Jr faced backlash for misleading ads, which hurt their brands. Now, in 2025, Zepto is under fire. A subreddit called r/F***Zepto is filled with users angry about the company’s dark patterns and unclear fee structure.

Disclaimer: This article is a long read, but worth it! We’ve covered Zepto in detail. Even though we tried to keep it short, it still ended up being over 3,400 words. You can check the reading time next to the author’s name. All the information is taken from public sources, and the points made are based on that. Happy reading and learning!

If you’re reading this, you’re interested, and rest assured, we’ll cover every key aspect of Zepto, along with insights into its competitors and the broader quick commerce space.

Zepto Founder Story

Most of us are still brainstorming business ideas with childhood friends, but Aadit Palicha and Kaivalya Vohra turned their friendship into a successful venture. At just 22, the duo co-founded Zepto, one of India’s leading quick commerce brands. Their entrepreneurial journey began during the COVID-19 pandemic when they saw an opportunity to redefine convenience through rapid grocery delivery.

Background of the Founders

Let’s take a look at the backgrounds of Aadit Palicha and Kaivalya Vohra. Both were admitted to Stanford University for Computer Science but dropped out to start a business. They share a strong interest in technology and coding. Before Kiranakart, Aadit founded GoPool at the age of 17. Later, both co-founded Kiranakart. They have been featured in Forbes 30 Under 30, the Hurun India Rich List, and more.

During the lockdown in 2020, when shopping was restricted, they identified a gap. They started a WhatsApp group to take orders from customers and deliver them to their homes. This simple idea quickly gained traction. As demand surged, Aadit and Kaivalya realized they could build a business out of it, leading to the formation of “Kiranakart” in 2020.

Transition to Zepto

Kiranakart wasn’t the only company delivering groceries; big players like Grofers (now Blinkit), BigBasket, and others were already in the market. However, Aadit and Kaivalya noticed something crucial: these platforms usually took 2 to 3 days to deliver, while most people could simply walk to their local grocery store and get what they needed in 10 minutes.

So they asked a simple question: why would anyone wait days for groceries when they can get them instantly from nearby stores?

To solve this, they decided to pivot from Kiranakart to Zepto in 2021, adopting a completely new approach: grocery delivery in just 10 minutes. This was made possible through a network of dark stores—small warehouses set up in different parts of the city to ensure fast delivery. Remarkably, they launched Zepto within just 45 days of making this decision.

It’s worth noting that the dark store concept wasn’t originally their idea, but they were quick to adopt and build on it.

Acknowledgment

If you're still reading, thank you. We truly appreciate it! In this deep dive, Zepto: Complete Business Model Analysis, we’ve ensured every aspect of the business is covered. As you read on, you’ll uncover even more interesting insights about Zepto.

Zepto Funding Analysis & Road to Profitability Vs Competitors

In this analysis, we examine the funding landscape of Zepto and its key competitors. However, we will not delve into funding details, as you can find all those details online. Instead, we will highlight major funding and investor developments, covering topics such as valuation trends, use of funds, cash burn & runway, path to profitability, and exit potential.

Zepto Funding History

Zepto:

Since its inception, Zepto has raised approximately $1.5 billion in equity, going through a series of rounds from Seed to Series A to Series F. The latest completed round is Series F, which was raised in two tranches: $665 million in June 2024 and $340 million in August 2024, valuing the company at $5 billion. There is news that Zepto is looking to raise another $350 million at a valuation of $7 billion, just seven months after the Series F round. The funding story for Zepto is a big success, but they are unable to turn the business profitable. We will explore the underlying factors, such as burn rate, runway, market share, and unit economics, to understand the challenges Zepto faces.

Global venture and growth investors have backed Zepto. The Series F was co-led by Glade Brook, Nexus, and Stepstone (with DST Global also participating). Other backers across rounds include Lightspeed Ventures, Avenir, YC Continuity (via Avra Ventures), General Catalyst, and earlier firms like Counter, Venture Highway, and many more. Notably, capital comes almost entirely from financial investors (venture/PE), not strategics. The presence of large global VCs and PEs (StepStone, Goodwater, DST, Lightspeed, GC) signals confidence in Zepto’s growth, but little obvious non-financial synergy beyond fintech expertise.

Blinkit (formerly Grofers):

Grofers is the oldest player in the market, founded in 2013. It raised several rounds before being acquired. Before the acquisition, Grofers had raised approximately $630 million by the end of 2021, led by marquee VCs. Right after this round and in early 2022, Grofers rebranded to Blinkit and pivoted fully to 10-minute delivery. Zomato first lent/converted capital ($100M in March 2022, plus a $150M loan) to cover losses. Ultimately, Zomato agreed in mid-2022 to acquire Blinkit for ₹4,447 crore (~US$568M) in stock. Technically, Blinkit is now a subsidiary of Zomato/Eternal Ltd.

Blinkit’s pre-acquisition backers were largely global VC/PE funds. Key names include SoftBank Vision Fund, Tiger Global, Sequoia Capital, and KTB Ventures. Post-acquisition, the “investor” is essentially Zomato/Eternal Ltd (controlled by Zomato shareholders and a PE consortium).

Swiggy Instamart:

Instamart (launched in 2020) has no separate funding; it is funded via Swiggy (Bundl Technologies) capital. Swiggy itself has raised ~US$3.6 billion (through 2024) from global investors. No dedicated funding round is reported for Instamart apart from Swiggy’s overall fundraising. Its backers are therefore Swiggy’s, notably SoftBank Vision Fund and Prosus.

Funding Conclusion:

Interestingly, most players in the quick commerce space have followed a similar funding trajectory. Grofers (now Blinkit), for instance, provided a successful exit opportunity for several early-stage investors through its acquisition by Zomato, setting a precedent in the segment.

Valuation Trends

Zepto:

You can refer to the graphic above, which illustrates Zepto’s valuation trajectory over the past four years (values shown in millions of USD).

Zepto’s valuation has climbed in every round. After being valued at ~$900M in mid-2022, it jumped to $1.4B (August 2023), then to $3.6B (June 2024), and finally to about $5.0B (August 2024). No flat or down rounds are reported. This contrasts with many other quick-commerce startups globally. In late 2024, Zepto was preparing for an IPO at these lofty levels.

Blinkit:

Blinkit’s value peaked in late 2021 as a unicorn (~$900M+), then collapsed. TechCrunch notes Blinkit “raised about $700M mostly equity” before acquisition but sold for only $568M (among shareholders) mid-2022, implying a steep down-valuation. Blinkit effectively experienced a down-round via acquisition (so existing investors took losses).

Under Zomato, Blinkit’s value has since risen (reports in 2024/25 put Eternal’s quick-commerce arm at $10–13B enterprise, mostly reflecting traffic growth, though these are internal estimates).

Swiggy Instamart:

Since Swiggy is a private limited company, obtaining financials for individual business verticals like Swiggy Instamart is challenging. Moreover, comparing Swiggy’s overall valuation with that of standalone quick commerce players like Zepto and Blinkit would be inaccurate and potentially misleading. For this reason, we have excluded Swiggy Instamart’s valuation from our comparative analysis.

Use of Funds

Zepto:

Primarily, capital has been used for its fulfillment network and to improve tech/operations. Management intends to use new funds to double its warehouse (dark stores) count and scale its delivery infrastructure. There is less public detail on R&D or technology spend, but the emphasis is on logistics footprint.

Blinkit:

Post-2022 funding for Blinkit came from Zomato. Zomato has injected approximately $520 million into Blinkit since the acquisition. Funds were used to massively expand Blinkit’s dark-store network and cut losses. Zomato planned to double Blinkit’s warehouses, targeting ~2,000 by the end of 2025.

Before Zomato stepped in, Blinkit had burned through capital with little tech R&D; under Zomato, it shifted to a partially inventory-led model to capture higher margins.

Swiggy Instamart:

Swiggy has ploughed billions into growing Instamart’s footprint. The strategy has been heavy capex on new dark stores and marketing. Marketing/discount spending has also been high to grab a share. Internal documents suggest Swiggy is shifting Instamart to long-term profitability: by late 2024, it targets mostly doubling density and efficiency (larger stores, closer to customers).

Cash Burn & Runway

Zepto:

Public filings show Zepto incurred heavy losses (₹1,248 crore in FY2024, roughly ₹100 crore/month). It also spent hundreds of crores on warehouse capex. Press reports imply aggressive burn: e.g., a November 2024 Mint report notes Zepto’s cash reserves were ~$1.4B after a $350M round, reflecting that it had raised over $1B in roughly six months. (No official “runway” figure is disclosed.) The steep losses imply Zepto has needed successive fundraises just to sustain its cash burn.

Blinkit:

Blinkit ran very high burn prior to Zomato’s support. In FY2024 (July 2023 to March 2024), Zomato reported Blinkit’s quarterly operating losses. For example, Q4 FY2024 (January–March) saw an operating loss of ₹178 crore. (That implies ~₹0.6–0.7B per quarter, or ~₹200–250M per month.) Zomato essentially funded that burn (by providing loans and equity). Exact burn figures are not public, but clearly Zomato’s injections (loan+equity) were needed just to sustain operations. There is no standalone “runway” data, but Zomato has committed to funding Blinkit aggressively (it budgeted several hundred crores per quarter in early 2025).

Swiggy Instamart:

Instamart has also been in burn mode. In Q4 FY2025 (January–March 2025), Swiggy disclosed Instamart’s operating loss as ~₹840 crore (over ₹250 crore per month). This was roughly triple its loss a year earlier, reflecting rapid expansion. Swiggy (public) has not broken out full-year Instamart losses, but the trend is increasing. Swiggy’s consolidated losses narrowed (due to food delivery improving), but Instamart continues to consume cash.

Path to Profitability

Zepto:

Zepto aims to move toward profitability by scaling more profitable orders and improving efficiencies. Management touts rapid store-level breakeven and higher-AOV categories (bicycles, etc.) to lift margins. Its co-founder has stated that Zepto is targeting “bottom-line profitability” through scale and mix improvements.

Blinkit:

Under Zomato, Blinkit has been on a path to profitability. By late-2024, Blinkit’s unit economics were turning positive (EBITDA breakeven was reportedly achieved in late FY2025). Blinkit has raised prices and AOVs, and Zomato has controlled discounting. The IOCC regulatory change now lets Blinkit use an inventory model and sell private-label goods, which should boost gross margins. The expectation is that Blinkit’s losses will shrink sharply; analysts in early 2025 projected EBITDA-neutrality by late FY2025 (calendar 2024). Actual profitability (post-EBITDA) will depend on G&A and further expansion, but Zomato’s focus is making Blinkit at least self-sustaining by mid-2025.

Swiggy Instamart:

Swiggy’s shareholder communications indicate that Instamart is still in an investment phase. Swiggy targets positive contribution margins as store density grows, aiming for break-even (EBITDA) by ~FY2026. Instamart’s losses have widened in absolute terms, but its unit economics (average order, cost per delivery) are improving. Swiggy’s formal guidance (December 2024) was to achieve profitability on a group basis by late 2025 (food plus Instamart together). Thus, Instamart’s trajectory is more in the “invest then profit” camp; full profit likely in 2025–26 if growth slows.

Exit Potential

Zepto:

Zepto is planning an IPO in 2025. It accelerated its plans after moving domicile from Singapore to India (approved January 2025). Its combination of top-line scale and improving store economics aims to position it alongside public peers (Zomato, Swiggy). (No other exits have been mooted; as the market’s “fastest” player, a public listing is the likely outcome.)

Blinkit:

Blinkit’s “exit” was its 2022 sale to Zomato for ~$568M (a fire-sale relative to invested capital). After the merger, Blinkit is part of Zomato/Eternal Ltd. No separate IPO is planned for Blinkit alone; any public-market event would be through Zomato’s listing.

Swiggy Instamart:

Instamart will exit via Swiggy’s public offering. Swiggy filed for an IPO in late 2024 (aiming for ~$12B valuation). Instamart’s value is effectively bundled into Swiggy’s valuation, but bankers estimate Instamart could represent 20–25% of Swiggy’s business.

Zepto Financial Statement Analysis vs Competitors

While Zepto, being a privately held company, does not disclose its complete financial statements, we were able to gather certain key financial data from available sources. Based on this information, we have drawn several informed conclusions.

The financial data reveals that Zepto has emerged as the revenue leader among India’s quick-commerce players in FY24, clocking ₹4,454 crore, nearly double that of Blinkit and four times Instamart. However, all three players continue to operate at a loss, with Zepto reporting a ₹1,248 crore net loss, and Instamart showing the steepest losses due to aggressive expansion.

Blinkit appears closest to profitability, achieving adjusted EBITDA breakeven by March 2024, signaling improved cost efficiency. In contrast, Zepto and Instamart are still in high burn phases, with Zepto’s monthly burn reaching ₹250–300 crore, and Instamart’s quarterly losses spiking to ₹840 crore.

While the entire sector is witnessing strong topline growth and scaling, the sustainability of this growth depends heavily on operational efficiency, unit economics, and cash management. Zepto’s leadership in revenue demonstrates strong demand and rapid scaling ability, but it must now navigate toward profitability, like Blinkit, while balancing expansion and burn control.

Business Strategy: Zepto vs Blinkit vs Swiggy Instamart

Product Assortment

• Zepto: ~2,500 essential SKUs (groceries, personal/home care).

• Blinkit: ~7,000 SKUs, broader mix of daily needs.

• Instamart: ~12,000 SKUs, largest selection.

  
  

Average Order Value (AOV)

• Zepto: ~₹470 (mid-range basket).

• Blinkit: ~₹660 (premium customers).

• Instamart: ~₹487 (higher volume shopping).

  
  

Delivery Network & Stores

• Zepto: ~350 dark stores in 10 cities (targeting 700 in 2025); 10-min delivery.

• Blinkit: ~791 stores in 40 cities (targeting 1,000+); 10-min delivery via Zomato fleet.

• Instamart: ~557 stores in 43 cities; ~30-min delivery via Swiggy’s network.

  
  

Pricing & Loyalty

• Zepto: Zepto Pass offers free delivery, cashback, and discounts.

• Blinkit: ~₹4 handling fee, no formal loyalty program yet.

• Instamart: Delivery often free for Swiggy One members; Maxxsaver for bulk discounts.

  
  

Technology & Partnerships

• Zepto: Unique tech platform – Zepto Atom with AI assistant for brand analytics.

• Blinkit: Leverages Zomato’s tools (like “Nugget”) and Gold memberships.

• Instamart: Taps into Swiggy’s customer base and restaurant ecosystem.

  
  

Zepto, Blinkit, and Swiggy Instamart are India’s top quick-commerce platforms, but each has a different focus:

Zepto offers a compact range (~2,500 essential items) with a strong 10-minute delivery promise via ~350 dark stores in major cities. It targets mid-range shoppers (₹470 avg. order) and stands out with its tech platform “Zepto Atom” and loyalty program Zepto Pass.

Blinkit provides a wider assortment (~7,000 items) across more cities (~791 stores), targeting higher-value orders (₹660 AOV). It relies on Zomato’s delivery and platform, with low handling fees but no major loyalty program.

Swiggy Instamart has the largest selection (~12,000 items) across ~43 cities and ~557 stores, with ~30-minute delivery powered by Swiggy’s network. It appeals to bulk buyers (₹487 AOV), offers Swiggy One benefits, and bulk discounts via Maxxsaver.

In summary, Zepto leads in speed and tech, Blinkit in range and premium orders, and Instamart in scale and Swiggy ecosystem integration.

Dark Patterns on Zepto: What Users Are Saying

Hidden Fees

Many users reported surprise charges after placing orders. For example, a ₹15–₹25 cash handling fee for COD orders often appears only after checkout — not on the invoice preview. Others noticed extra costs like “Rain Fee,” “Item Handling Cost,” or “Convenience Fee” showing up at the last minute, inflating the total bill without warning. Some called it “cheating” and unfair trade practice.

Misleading App Design

Zepto has made changes that quietly push users into more expensive options. For example, the COD payment button is now the default, catching users off guard. Even those who pay for Zepto Pass (free delivery) have to manually apply a coupon each time; otherwise, they still get charged for delivery. Users say this design trick makes them forget and pay more.

False Urgency

While not as common, Zepto has shown messages like “Only 1 item left” or timers that pressure buyers to act fast. These are flagged by India’s Consumer Affairs Ministry as deceptive, especially if the urgency isn’t real.

Subscription Trap

Zepto Pass users are upset that even after paying for the pass, the free delivery benefit isn’t automatic. You must remember to click a hidden coupon link — or you get charged. Many feel this defeats the purpose and call it a classic “subscription trap.”

Deceptive Checkout

Some customers noticed differences between the amount shown at checkout and the final bill. For example, a ₹5–₹30 fee was added only after order confirmation. These hidden charges aren't clearly shown upfront, which many see as misleading.

Public & Government Pushback

People have taken to social media and Reddit to share their frustration. One community with over 9,000 members is dedicated to exposing Zepto’s tricks. In May 2025, India’s Consumer Affairs Ministry sent warnings to 11 companies, including Zepto, for using dark patterns like hidden fees and misleading design. Regulators say such practices must stop.

Bottom Line

Zepto’s tactics — from hidden charges to confusing app design — have sparked consumer anger and official warnings. While Zepto is still a favorite for many, these dark patterns may damage its trust if not addressed.

Zepto SWOT Analysis

Strengths

• Fastest delivery: 10-minute promise via tech-enabled dark stores.

• High fill rates on essential products.

• Strong backing: ~₹16,000 crore funding and 28% quick-commerce market share (early 2024).

• Innovative services: Zepto Atom (brand analytics) and Zepto Pass (loyalty).

• Aggressive execution by a young, Silicon Valley–inspired founding team.

  
  

Weaknesses

• High cash burn: ₹250–300 crore/month; FY24 loss >₹1,200 crore.

• Limited city reach: Only in ~10 cities vs rivals in 40+.

• Lower pricing power and smaller loyalty base than Blinkit/Instamart.

• Service complaints: Users report stock issues and high delivery charges.

• Heavy funding dependence to sustain operations.

  
  

Opportunities

• Market boom: Quick-commerce market could grow to ₹5–₹60B by 2030.

• Urban demand rising for convenience and variety (electronics, beauty, etc.).

• City and category expansion potential.

• Tech edge (Zepto Atom) enables brand partnerships and insights.

• Strategic tie-ups possible with retailers like Reliance.

• IPO or Indian ownership could unlock more capital.

  
  

Threats

• Fierce competition: Blinkit (Zomato), Instamart (Swiggy), Amazon, and Reliance are scaling fast.

• Market share pressure as rivals grow faster.

• Regulatory risks: CCI scrutiny on discounting and local issues.

• Rising costs: Fuel, delivery labor, and operational challenges at high speed.

• Funding risk: Delays or crunches may hurt expansion or sustainability.

Conclusion

Zepto has rapidly scaled to become a leader in India’s quick-commerce space, backed by nearly $2 billion in funding and a bold 10-minute delivery promise. However, its high burn rate, unclear path to profitability, and rising user backlash over dark patterns raise serious concerns. While the company continues to attract investor confidence and is eyeing an IPO, sustaining long-term growth will depend on improving operational efficiency, rebuilding consumer trust, and navigating fierce competition from Blinkit and Swiggy Instamart.