Zepto overtakes Instamart in order count, trails Blinkit in scale and profitability

Zepto’s updated draft draft red herring prospectus (DRHP) offers fresh insight into its standing in India’s quick commerce race, with analysts and investors expecting the startup’s upcoming fundraising to intensify competition in a market already locked in an expensive battle for growth. The five-year-old company filed the updated prospectus on Monday for its initial public offering, through which it plans to raise Rs 8,010 crore in fresh capital.

The latest disclosures show Zepto has overtaken Swiggy Instamart on order value and volumes, but continued to trail Eternal-owned Blinkit on scale and profitability. Zepto reported a net order value (NOV) of Rs 7,591 crore for January-March FY26, its DRHP shows. Blinkit reported Rs 14,386 crore and Instamart posted Rs 5,674 crore for the quarter, according to public filings of their parent companies.

Zepto is set to become the first standalone quick commerce company to list in India. Blinkit and Instamart operate within listed entities Eternal and Swiggy, respectively.

The DRHP mentioned that founders Aadit Palicha and Kaivalya Vohra were summoned by the Directorate of Enforcement (ED) in April under the Foreign Exchange Management Act, and details were sought on foreign investments in the company, its shareholding and business model. ET earlier reported that ED had asked Zepto to join its probe into alleged money laundering linked to banned betting platform Parimatch.

The startup processed 210 million orders in the March quarter.

Cash burn continues

This is compared with 273.9 million by Blinkit and 112.6 million by Instamart.

Zepto ended the quarter with 1,139 dark stores, almost identical to Instamart’s 1,143, but processed significantly more orders through its network.

“Zepto will have to take a measured approach. Instamart, after its (Rs 10,000-crore) QIP, saw its losses increase when they were focusing on growth...things didn't work out for them. They had to then shift gears and compromise on growth. Now, the cost of capital is very high globally...investors are more likely to ask for a path to profitability,” said Karan Taurani, executive vice president at Elara Capital.

The competitive battle extends well beyond the top three players. Walmart-owned Flipkart and Amazon India are rapidly scaling their quick commerce businesses, adding another layer of pressure in a segment where delivery speed, dark store density and assortment have become key differentiators.

ET reported in March that Flipkart Minutes, launched in August 2024, was adding around 100 dark stores every month and was expected to grow its network to about 1,200 stores by June. It is also developing a standalone Minutes app, with a pilot expected around July followed by a wider rollout later this year.

Amazon’s quick commerce offering, Amazon Now, is expanding beyond its initial markets, with plans to reach more than 100 cities and 1,000 dark stores. The company has announced fresh investments to strengthen operations, making quick commerce a sharper strategic focus. Its India head, Samir Kumar, told ET earlier this month that Amazon Now was poised to become India’s largest quick commerce player in the near term.

Also Read: Here to win quick commerce, will become market leader in near-term: Samir Kumar, Amazon India chief

“Fresh capital across multiple players means the intensity of competition is unlikely to ease. Companies are still prioritising customer acquisition, assortment and expansion over profitability, which suggests cash burn across the sector could remain elevated for some time,” said an analyst with a domestic brokerage firm, who tracks the internet sector.

Profitability elusive

While Blinkit has turned operationally profitable and Instamart has shifted away from a pricing-led strategy to improve margins, Zepto reported steep operating losses for both the March quarter and FY26.

Zepto's net average order value at Rs 361 for the March quarter came below Blinkit’s Rs 525 and Instamart’s Rs 504. Lower basket sizes can weigh on unit economics unless offset by higher order density, advertising income, user fees and supply chain efficiencies.

"In private markets, investors were willing to underwrite aggressive expansion. Public market institutional investors will support growth...but only if management can show improving unit economics and a credible roadmap to cash generation," another mutual fund executive said.

Both Blinkit and Instamart flagged slowdown in growth during January-March, after multiple quarters of over 100% year-on-year growth.

For the final quarter of FY26, Zepto posted an adjusted Ebitda loss of Rs 1,247 crore. Instamart's adjusted Ebitda loss was smaller at Rs 858 crore, while Blinkit reported positive adjusted Ebitda of Rs 37 crore.

ET reported in April that Zepto was working to reduce cash burn and improve profitability ahead of its public listing. In its updated DRHP, the Bengaluru-based company said it reduced its fixed cost per order to Rs 62.67 in FY26, from Rs 80.19 in FY25.

Despite these improvements, the company continues to consume significant cash. For FY26, it reported a negative free cash flow of Rs 4,329 crore, and held cash and cash equivalents of Rs 5,680 crore as of March 31.

For both Eternal and Swiggy, food delivery is an operationally profitable business. Zepto lacks that cushion to offset the impact of cash burn. “Zepto does not have food delivery to back it up. Quick commerce is its sole business,” said Satish Meena, founder of ecommerce consultancy Datum Intelligence. “The kind of losses they are making are massive. Even if they raise Rs 8,000 crore, at this rate, it will not last very long. They may have to raise more funds if they follow the same path.”

War chest

Following its expected listing in July, Zepto will hold around Rs 13,680 crore in cash, including IPO proceeds. By comparison, Blinkit parent Eternal has nearly Rs 18,000 crore in cash, while Swiggy holds around Rs 15,000 crore.

Zepto said it plans to deploy the fresh capital towards expanding its dark store network. During roadshows with institutional investors earlier this year, however, the company's senior management indicated the startup expects to drive higher order volumes without materially increasing the size of its dark store footprint.

The company has also told investors it aims to differentiate itself from Blinkit by targeting more value-conscious consumers.

"There are two battles now. Swiggy (Instamart) and Zepto have to fight for market share, and both will have to spend a lot of money. Blinkit has a different battle with Amazon. This is not ending very soon,” Meena said.