From Burn to Earn: What’s Behind Startups’ Pre-IPO Profit Makeovers?

Mumbai, May 30, 2025 — As India's IPO pipeline fills up with high-profile start-up names, a striking trend is coming into focus: startups flipping from losses to profits just before going public. This pre-IPO "glow-up" has raised eyebrows across the investor and regulatory communities, as the timing of these financial turnarounds appears more than coincidental.

A key example is Zepto, the quick commerce player aiming to go public by late 2025. According to co-founder Aadit Palicha, the company slashed its cash burn by 65% in just five months, while simultaneously improving EBITDA by 20 percentage points between January and May 2025. Despite the cost-cutting, Zepto still reported a 20% growth in Gross Order Value (GOV), growing 4–5% month-over-month.

While such numbers are likely to impress IPO-bound investors, critics argue that aggressive financial engineering and last-minute operational tightening may create an unsustainable illusion of profitability. Analysts warn that such strategies may not reflect long-term fundamentals, especially in highly competitive sectors like food delivery, fintech, and e-commerce.

Still, the practice continues as startups seek public validation and funding, with founders eager to tell a story of not just innovation—but profitability. Whether this newfound fiscal discipline is here to stay or just a temporary makeover remains to be seen.