e-commerce
Zepto’s ad business doubles as quick commerce races towards IPO
Ad revenue jumps to Rs 1,635.7 crore in FY26 even as losses and cash burn persist
MUMBAI: Speed may deliver groceries in minutes, but it’s advertising that’s increasingly delivering the money. As Zepto prepares for its proposed initial public offering (IPO), the quick commerce company is emerging as a formidable advertising platform, with brand partnerships becoming one of its fastest-growing revenue engines even as losses and cash burn continue to weigh on its balance sheet.
According to the updated draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (Sebi), Zepto’s advertising revenue more than doubled to Rs 1,635.7 crore in FY26, up from Rs 651.2 crore in FY25 and just Rs 49 crore in FY24, highlighting the growing role of platform monetisation in its business model.
The advertising surge accompanied strong top-line growth. Zepto reported revenue of Rs 7,497.6 crore during the January-March quarter of FY26, compared with Rs 4,278 crore in the corresponding period last year, reflecting continued momentum in its quick commerce operations.
Despite the rapid expansion, profitability remained elusive. The company’s restated loss narrowed to Rs 1,538.6 crore in the fourth quarter of FY26 from Rs 1,832 crore a year earlier, while free cash flow remained negative at Rs 882.2 crore, improving from Rs 2,183 crore in the corresponding quarter of FY25.
Net cash used in operating activities also showed signs of improvement, declining to Rs 684.8 crore from Rs 1,991 crore in the year-ago period.
In its filing, Zepto said operating losses continued as major costs expanded alongside rising order volumes and network capacity. Expenditure on traded goods, delivery and handling, employee benefits and advertising all increased as the company scaled its operations.
The company also underscored the importance of marketing in driving growth, noting that customer acquisition depends heavily on digital campaigns, social media, billboards and both online and offline advertising. While advertising expenditure rose across FY24, FY25 and FY26, FY25 witnessed the sharpest increase as Zepto invested aggressively in brand-building initiatives to attract and retain customers.
However, the latest quarter also reflected a more measured approach to spending. Advertising expenses fell to Rs 252.3 crore during the January-March period of FY26, compared with Rs 314.3 crore in the same quarter last year, suggesting the company is beginning to optimise its marketing investments.
Zepto also reported that user growth is normalising after an explosive expansion phase. Annual transacting users rose from 10.57 million in FY24 to 38.38 million in FY25 and 47.97 million in FY26, although the growth rate slowed to 25 per cent in FY26 from 263.18 per cent the previous year.
Even as cash flows remained under pressure, the company strengthened its liquidity position. Its closing cash balance, including investments, increased from Rs 1,688.2 crore as of 31 March 2024 to Rs 5,680.5 crore as of 31 March 2026, providing a larger financial cushion to support future expansion.
As Zepto heads towards the public markets, its latest filing paints the picture of a company where groceries may drive traffic, but advertising is rapidly becoming the business that’s ringing up bigger receipts.
