As quick commerce company Zepto prepares for its proposed ₹8,010-crore initial public offering (IPO), one of the more significant disclosures in its updated draft red herring prospectus (UDRHP) is its transition to a marketplace-led business model, a move that could have implications for both profitability and regulation.
The company, which filed updated IPO papers with SEBI earlier this week, is looking to raise funds through a fresh issue of shares, while existing investors including Nexus Venture Partners and Contrary Capital will participate in an offer-for-sale. Zepto plans to use the proceeds primarily to expand its dark-store network, fund lease payments, invest in technology and cloud infrastructure, support marketing initiatives and pursue strategic acquisitions.
Amid those expansion plans, the marketplace transition signals a shift in how the company intends to monetise its rapidly-growing user base.
Under the marketplace model, third-party sellers list products on the platform while Zepto earns commissions, advertising income and service fees rather than relying solely on inventory ownership and product sales. The company noted in its filing that it has limited operating history under this structure.
The move comes at a critical juncture. Despite more than doubling revenue from operations to ₹22,624 crore in FY26 from ₹11,110 crore a year earlier, Zepto’s losses widened to ₹5,905 crore (₹4,700 crore) as it continued investing heavily in dark stores, logistics and customer acquisition.
Capital efficiency
Industry observers say a marketplace model can potentially improve capital efficiency by reducing inventory-related risks and working-capital requirements. More importantly, it opens up additional revenue streams such as commissions, merchant services and advertising, areas that typically carry higher margins than product sales.
Advertising has already emerged as one of Zepto’s fastest-growing businesses. Advertising revenue jumped 151 per cent to ₹1,636 crore in FY26 (₹651 crore), highlighting the growing importance of quick-commerce platforms as marketing channels for consumer brands.
The transition could also help Zepto align itself with India’s evolving ecommerce regulatory framework, where inventory ownership and seller relationships have often come under scrutiny. Marketplace structures have historically been viewed as more compliant with foreign investment norms governing ecommerce operations.
For investors evaluating Zepto’s IPO, the marketplace pivot may prove as important as its revenue growth. While the company continues to prioritise scale, the shift suggests management is also focused on building a less capital-intensive business model capable of generating higher-margin revenues over time.
As competition intensifies and public market investors demand a clearer path to profitability, Zepto’s success may increasingly depend not just on how many orders it delivers, but on how effectively it monetises each one.