In the hyper world of Indian quick commerce, where billions are poured into minutes saved, Zepto has seen much speed, sadly in a U-turn, over the past few weeks, the $10 billion valued, India’s fastest-growing consumption category has been caught in a media storm.

Viral videos exposing poor hygiene at one of its dark stores, Reddit threads detailing alleged toxic work culture, and X (formerly Twitter) posts accusing the company of deploying “dark patterns” to sneak in hidden charges — all have coalesced into a story that’s hard to control. The company, quick to defend itself, cited course correction and temporary suspension reversals. But damage, especially reputational, rarely plays by delivery time slots.

Cracks Behind the Curtain
Behind the consumer outrage lies a truth –  Zepto is recalibrating. What was once a capital-intensive blitz ($150 million burned each quarter to muscle into Blinkit’s market share) has now morphed into what looks like a cautious slowdown.

Discounts have shrunk, contracts with sellers and logistics partners have been renegotiated, and delivery partner fees slashed. The company has even shifted some on-roll jobs to off-roll to manage costs. Zepto isn’t sprinting anymore. It’s limping, regrouping.

The real question is – can a brand built on frenzy survive restraint?

When the Growth Engine Slows
A closer look at hard data suggests the adrenaline rush is fading. Sensor Tower data shows new app downloads plummeted from 16 million in January to just 3.6 million in May. Monthly active users peaked in March at 64.7 million but fell to 60.9 million by May, below even January levels. In the cutthroat game of quick commerce, such drops are warning signs not mere numbers.

Zepto’s response?

Fewer new dark stores, only 22 added during April-May versus Blinkit’s 98 and Swiggy Instamart’s 118, according to JP Morgan. Blinkit now boasts the largest dark store network with 1,400 locations, followed by Swiggy at 1,124. Zepto, once breathing down their necks, trails with 1,099 and is expected to open just 30 stores this quarter – down from 100 last quarter and 300 the quarter before that.

Even hiring, once an aggressive indicator of scale, has tapered. After tripling headcount to 5,755 in just a year, Zepto recorded its first decline in on-roll employees in over a year. May saw a reduction of 115 employees, as per EPFO filings via Tracxn.

And most tellingly, Zepto’s GMV (a metric Palicha himself touted as tripling to $3 billion in January) seems to have stalled. In April, he said GMV was “nearing” $4 billion. Three months later, he’s still quoting the same figure.

From Blitzkrieg to Balancing Act
The shift may not necessarily a death knell, but it’s certainly a sign of caution. Market research expert Satish Meena points out that user slowdown and fewer store additions are more reflective of budget tightening than recent PR disasters. When discounts shrink, so does traffic, when capital dries, growth not only pauses it risks reversal.

Expansion, Stabilisation, Repeat,  But at What Cost?

For Aadit Palicha, however, this slowdown is just a pit stop. In his words, Zepto is following a cycle: expand, stabilise, expand again. He insists this is part of the strategy but this time, the next lap will need rocket fuel. Zepto plans to open 150 new dark stores next quarter (a fivefold jump from its current pace), that kind of expansion runs on capital not on optimism alone. 

And capital, in this market, comes with conditions and consequences.

Unlike its heavyweight rivals, Zepto doesn’t have deep-pocketed, politically connected, or globally dominant benefactors. Zomato had Temasek and Alibaba. Swiggy had SoftBank and Prosus to cushion its burn. Zepto has raised nearly $2 billion – impressive in a brutal funding climate – but it still lacks a marquee global fund house that can write blank cheques when the house starts to shake.

The current round doing the rounds is reportedly $700 million at a $7.5 billion valuation, with term sheets said to be in circulation. Key existing investors like Avenir and General Catalyst have committed, but Zepto isn’t stopping there. It is knocking on the doors of domestic wealth, from Motilal Oswal Capital to Ramdeo Agrawal (who is said to be investing personally).

Why Indian Capital Matters Now
There’s a deeper game being played here. One that goes beyond deliveries and discounts, it’s the regulatory game of foreign ownership. 

Under India’s FDI rules, retail companies majority-owned by foreign entities can’t hold inventory directly. That’s a critical disadvantage in the cutthroat world of quick commerce, where owning your warehouse, your stock, and your supply chain could make the difference between margins and misery.

Blinkit saw it coming. Its parent, Eternal, reduced foreign ownership from 56% to 45% in a year, effectively becoming a majority Indian-owned company. Swiggy too is walking that line, slashing its foreign shareholding from 80% during listing prep to around 63% now. At this pace, it could dip below the 50% mark in under a year.

And Zepto says 30% of its ownership is with Indian investors. But if it doesn’t move fast, regulatory handcuffs could limit how it scales, how it controls inventory, and ultimately, how it competes. Therefore, the IPO, then, is more than an exit strategy making it a survival strategy. The path is clear, if not easy: raise capital in this round, file a DRHP, go public, and flip to majority Indian ownership, all in the next 12 months. Anything less, and it risks becoming the fastest-growing outsider in a game that increasingly favors insiders.

The Last Bit,

All eyes are on the current $700 million fundraising round. The outcome of this round will determine whether Zepto stays in the race with Blinkit and Swiggy or slips into a slower lane, weighed down by caution and cash crunch. The illusion of uninterrupted growth, after all, only lasts as long as the runway is funded.

But even as it courts capital, Zepto can’t afford another Dharavi. The viral clip of a rodent-infested dark store was more than just bad PR, it was a breach of trust in a market where switching costs are almost zero. The moment a user sees a fly in one app, they tap into another. That’s the brutal economics of quick commerce.

Moreover, the category thrives on impulse, not loyalty. Three out of four users have more than one quick-commerce app installed, says Satish Meena of Datum. Premium customers (often the biggest basket-size drivers) switch the fastest. One misstep, one hidden charge, one late delivery, and the app icon gets buried in a folder, or worse, deleted.

And Zepto knows it. That’s why, even as it clamps down on costs, it’s selectively loosening the purse strings. A user who hadn’t ordered in weeks recently received an aggressive reactivation offer – ₹1,500 in guaranteed cashback. The message simple – churn is dangerous, and retention is expensive.

Yet Zepto has little choice but to play offense. The quick-commerce prize is enormous. As per Bernstein, the space has already crossed $10 billion in GMV with 50 million users. Within the decade, it’s projected to be a $100 billion battlefield. gets you headlines. Capital gets you scale. And in quick commerce, you can’t have one without the other.

Hype can buy attention. Capital can buy growth. But survival has to be earned, one clean store, one honest bill, and one strategic funding round at a time.