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

**Rachel Varghese** (0:01)
For a company that just turned 6 years old, Zepto has been making some big promises for a while now. For example, Aditya Palichha, 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 DMart, 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 Suprita Noopam 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 5 years, Zepto has raised more than $2.5 billion.
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, 5 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 FY25 to more than 22,500 crore rupees in FY26. Even the company's total income was impressive. At more than 2.4 billion dollars 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 dollars. 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, Palicha 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 the stress market with growing geopolitical tensions. And with increasing competition in the quick commerce 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, Rachel Varghese and every day of the week, my co-host Snigdha Sharma and I will bring you one new story 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 raised close to 6 billion to public offerings in 2026 This is after record years of fundraising. More than $22 billion raised in 2025 and $20 billion plus 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 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 PhonePay, 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 Rossoi Magic, saw a lot of excitement initially. Their shares were even 50-70 times oversubscribed. But when they actually listed, both stocks traded at prices below what they were sold at. Even popular household name companies like Lenscut, 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.