How Zepto Makes Money? Decoding the Billion-Dollar Speed Engine

It’s 11:00 PM. You are about to start a movie marathon, but you realize you are out of popcorn and Coke. A few years ago, you would have changed into decent clothes and walked to the nearest shop, hoping it was still open.

Today? You tap your phone screen a few times, and before you can even decide which movie to watch, your doorbell rings. The popcorn has arrived.

This isn't magic. This is Zepto.

In the fiercely competitive world of Indian startups, Zepto is an anomaly. While giant e-commerce players were proudly offering "next-day delivery," Zepto crashed the party with an audacious promise: "10 minutes." Many dismissed it as a gimmick that would burn out fast.

Yet, here we are in 2026. Zepto is not just surviving; it has become a multi-billion dollar giant that forced older, bigger companies to change their entire strategy.

But the million-dollar question (or rather, the billion-dollar question) remains: How does this actually work? Is it just fueled by investor money, or is there a real business underneath the incredible speed?

In this deep dive, we will decode the Zepto business model. We’ll explore the "Dark Store" secret, uncover their multiple streams of revenue, and learn how two teenagers built one of India’s fastest-growing startups.

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The Origin Story: Two Teenagers, A Pandemic, and a Bold Idea

Every great startup has an origin story rooted in solving a personal pain point. Zepto is no different.

The story begins in 2020, during the peak of the COVID-19 pandemic. Two childhood friends from Mumbai, Aadit Palicha and Kaivalya Vohra, were studying computer science at the prestigious Stanford University in the US. When the pandemic hit, they returned home to Mumbai.

Like everyone else locked inside, they struggled to get groceries delivered. Local kirana stores were overwhelmed, and big players like BigBasket took days to deliver.

Aadit and Kaivalya, then just 19 years old, saw a massive gap. They realized that for essential items—like milk, bread, or vegetables—people didn't want to wait 24 hours.

They took a huge risk. They dropped out of Stanford to solve this Indian problem.

They initially started with an app called KiranaKart, partnering with local stores to deliver within 45 minutes. It was okay, but not revolutionary. They realized the only way to control the speed was to control the inventory themselves.

In 2021, they pivoted, rebranded to Zepto, and introduced the 10-minute delivery model. The rest is history.

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The Engine of Speed: What is a "Dark Store"?

If you want to understand Zepto's success, you have to understand their core innovation: The Dark Store Model.

When people hear "Dark Store," they often imagine something secretive or underground. The reality is much simpler and smarter.

A Dark Store is essentially a micro-fulfilment center or a small warehouse located right in the heart of dense residential neighborhoods.

Why are they called "Dark"?

Because they are dark to the public eye. Unlike a D-Mart or Reliance Smart, you cannot walk into a Zepto store to browse or shop. They are purely for operations, manned by packers and delivery partners.

The Geography of Speed

The secret to 10-minute delivery isn't fast bikes; it’s proximity. Zepto doesn't deliver from a massive warehouse outside the city limits. They have hundreds of small dark stores scattered across the city.

When you open the app, you are matched with a store that is likely within a 1.5 to 2-kilometer radius of your current location. The travel time is barely 5-7 minutes; the rest is packing time.

Inside the Matrix: The 60-Second Pack

The inside of a Zepto dark store is an engineering marvel designed for speed.

• Data-Driven Layout: Products aren't arranged to look good; they are arranged based on data. High-demand items (like milk, eggs, chips) are kept closest to the packing station.

• Tech-Enabled Packers: Packers use tablets that tell them exactly which aisle and shelf an item is located on. They don't waste seconds searching.

The goal? To pack an average order in under 60 seconds from the moment you click "Pay."

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The Money Question: How Does Zepto Actually Generate Revenue?

This is the part that confuses most people. "If they deliver a ₹30 packet of biscuits for free (sometimes), how do they pay the rider, run the store, and make a profit?"

It’s a valid skepticism. Quick commerce is an incredibly expensive business to run. To survive, Zepto cannot rely on just one source of income. They have built a robust revenue model with multiple streams.

Here are the four main ways Zepto makes money:

1. Commission on Products (The Margins)

This is their bread and butter. Zepto operates on an inventory model. They buy products directly from manufacturers (like HUL, Nestle, Amul) or large distributors in bulk. Because they buy in huge volumes, they get these products at significant discounts.

When they sell the product to you at MRP (Maximum Retail Price), they keep the difference as their gross profit margin. On average, quick commerce platforms aim for a 15% to 25% margin, depending on the category (fresh produce has higher margins than branded packaged goods).

2. Delivery and "Surge" Fees

While Zepto uses free delivery as a hook to acquire new users, they are increasingly monetizing the convenience.

Small Cart Fee: If your order value is very low (e.g., below ₹100), they add a small cart fee. This d0iscourages unprofitable tiny orders.

Surge Pricing: Have you noticed delivery fees spike when it’s raining heavily or during peak evening hours? This is dynamic "surge pricing," similar to Uber or Ola. When demand is high and riders are scarce, customers pay a premium for the guarantee of speed.

3. Zepto Pass (The Subscription Loyalty Loop)

Taking a page out of Amazon Prime's playbook, Zepto introduced "Zepto Pass."

This is a subscription model where users pay a small monthly recurring fee in exchange for benefits like unlimited free deliveries on orders above a certain threshold (usually ₹99) and extra discounts.

Why this is brilliant for business: Once a user buys Zepto Pass, they are mentally "locked in." They stop checking competitor apps like Blinkit or Swiggy Instamart because they want to maximize their pass benefits. This guarantees customer loyalty, higher order frequency, and a predictable monthly cash flow for Zepto.

4. Advertising Revenue (Zepto Atom)

This is the hidden goldmine of quick commerce. Zepto has launched its own advertising platform, often called Zepto Atom.

Think about it: Zepto knows exactly what you buy, when you buy it, and how often. This data is incredibly valuable to brands.

Sponsored Listings: If a new juice brand wants to be noticed, they can pay Zepto to appear at the top of search results when a user types "juice."

Banner Ads: Brands pay for visibility on the app’s homepage.

Samples: Brands pay Zepto to slip a free sample of a new product into your delivery bag.

Advertising is almost pure profit for Zepto, as it costs them very little to display a digital ad to a high-intent buyer.

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Challenges: It’s Not All Smooth Sailing

While the growth story is incredible, it’s important to look at the reality. The quick commerce model is notoriously cash-intensive.

High Burn Rate: Running hundreds of dark stores, paying thousands of riders, and tech costs money. Zepto burns significant cash every month to fuel its operations.

Intense Competition: Zepto isn't alone. Zomato-owned Blinkit and Swiggy Instamart are massive competitors with deep pockets. The fight for market share is brutal.

Regulatory Risks: The safety of delivery riders trying to meet 10-minute deadlines has often come under scrutiny by authorities and the public.

Zepto's long-term success depends on shifting from "growth at all costs" to sustainable profitability, largely by increasing average order values and maximizing ad revenue.

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Conclusion: The New Normal

Zepto's journey from a Mumbai living room to a valuation of over $7 billion in just a few years is a testament to the power of understanding consumer behavior.

Aadit and Kaivalya proved that in modern India, convenience is the ultimate commodity. People value their time more than ever, and they are willing to pay a premium for instant gratification.

For aspiring entrepreneurs reading this, the lesson from Zepto is clear: You don't always need to invent a brand-new product. Sometimes, the biggest opportunities lie in taking an age-old behavior—like buying groceries—and reinventing the experience with technology and incredible speed.

The 10-minute revolution is here, and it has permanently changed expectations. Now, waiting even an hour feels too long.

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What are your thoughts on the 10-minute delivery model? Is it a sustainable business or just a VC-funded bubble? Let us know in the comments below!

(FAQs) About Zepto

1. Who are the founders of Zepto? Zepto was founded by two childhood friends, Aadit Palicha and Kaivalya Vohra. They were both studying Computer Science at Stanford University but dropped out in 2020 to return to India and start their business journey.

2. How does Zepto deliver in 10 minutes? Zepto uses a network of "Dark Stores" (micro-warehouses) located within high-demand neighborhoods. Because these stores are only 1-2 kilometers away from the customer and pack orders in under 60 seconds using advanced technology, they can deliver extremely fast.

3. Is Zepto an Indian company? Yes, Zepto is a proudly Indian startup. It is headquartered in Mumbai, Maharashtra, and operates across major Indian metro cities like Bengaluru, Delhi, Gurugram, Chennai, Hyderabad, and Pune.

4. Is Zepto profitable? As of 2026, Zepto focuses heavily on growth and expansion. While it is not yet fully profitable on a net basis (due to high expansion costs), many of its individual dark stores are "EBITDA positive" (operating at a profit). They are aiming for full profitability soon.

5. How does Zepto make money if delivery is free? Zepto makes money through four main channels:

• Commissions: Earning a margin on every product sold.

• Delivery Fees: Charging for small orders or during rain/peak hours

• Zepto Pass: A subscription membership for loyal users.

• Advertising: Brands pay Zepto to show ads inside the app.

6. What is the difference between Zepto and Blinkit? While both offer quick delivery, the main difference lies in their execution. Zepto started as a pure-play 10-minute delivery service focusing solely on groceries, while Blinkit (owned by Zomato) leverages Zomato’s massive existing user base. Both now compete fiercely on speed and product variety.