Zepto’s IPO filing revealed rapid growth, heavy losses, and a valuation question that no one has yet answered

Indian startup Zepto has unveiled plans for an initial public offering worth nearly $1 billion, putting Y Combinator’s biggest bet outside the US on its way to the public markets.

The filing, released on Monday, offers a rare look at how one of India’s most watched startups plans to sustain its growth after listing. Zepto’s advertising revenue rose more than 151% year-on-year to R16.4 billion (about $171 million) in fiscal 2026, outpacing the company’s 104% increase in operating income to R115.5 billion (about $2.4 billion).

While grocery delivery remains Zepto’s core business, the rapid growth of its advertising arm points to a broader shift in how the startup makes money — a strategy that Amazon pioneered, turning the marketplace into one of the most profitable ad businesses in the world by selling exposure to the same sellers competing in its space.

Founded in 2021 by Stanford dropouts Aadit Palicha and Kaivalya Vohra, Zepto has grown to become one of India’s fastest-growing startups, competing with Zomato-owned Blinkit and Swiggy’s Instamart in the country’s highly competitive fast-casual market. Amazon and Walmart-backed Flipkart have also stepped up their efforts in the segment in recent months.

Despite intense competition, Zepto continued to add customers and orders at a rapid clip. The startup has processed more than 640 million orders in fiscal year 2026, according to draft figures, nearly double the previous year, and annual trading users have risen to nearly 48 million. Even as it expanded its network to 1,139 stores, orders at each store continued to grow, suggesting that demand is growing closer to its location.

That growth comes at a cost, however. Zepto remains loss-making, reporting a net loss of ₹ 59.1 billion (about $617.36 million) in fiscal 2026, compared to ₹ 47.0 billion (about $492.45 million) last year. The startup acknowledged in its filing that it may continue to incur losses and may not be able to sustain its historic growth rates, a common disclosure but one that highlights the tensions facing venture-backed companies seeking public market investors before reaching profitability.

Zepto plans to raise up to R80.1 billion (about $837.41 million) through a new share issue. The IPO will also include an offering for the sale of up to 113.5 million shares by existing investors including Nexus Venture Partners, Contrary, and Razor Ventures, with the final size of the sale depending on the final price of the offering. The startup also said it could raise up to R16.02 billion (about $167 million) from investors in the pre-IPO space ahead of the listing.

The list is set to provide a closely watched result for some of Zepto’s early supporters. The startup raised $7 billion in its last funding round in October and counts Y Combinator, Lachy Groom, Nexus Venture Partners, StepStone, Glade Brook, and Lightspeed among its investors.

Several prominent shareholders – including funds affiliated with Y Combinator, Lightspeed, StepStone, Groom, and Glade Brook – are not participating in the IPO sale, choosing to keep their floors as the startup prepares for its market debut. That should be put on hold: Zepto’s public market valuation remains uncertain, and some joint venture and family offices that reviewed the company before the IPO indicated a valuation below the last private round, according to people familiar with the matter.

The founders of Zepto, the document revealed that they received a summons from the branch that oversees financial violations in India, the Enforcement Directorate, through Mpalakazi, seeking information on foreign investment, the organization of the company’s shares, and other matters under the country’s foreign transaction laws.

The two appeared before the agency and provided the information and documents requested. Zepto said it had not received any further communication from the regulator since then, but warned it could not rule out future inquiries, investigations or fines.

The proposed listing marks the culmination of a multi-year effort to prepare for a domestic market launch. Zepto moved its official home from Singapore to India last year, joining a growing number of startups reorganizing their holding companies as local public markets become more attractive to tech giants.