Zepto’s recent $450 million fundraise—one of the largest in India’s consumer internet space this year—cements its position as a frontrunner in the quick commerce race. With approximately $900 million in net cash now on its books, the startup is not only well-capitalised but also navigating the unique challenge of being “overcapitalised”—a problem most founders would welcome, but one that demands careful strategic discipline.
In a candid conversation with Forbes India, co-founder and CEO Aadit Palicha talks about what makes Zepto such a funding magnet, including the trust it has built with investors through professional governance, clean audits and operational transparency. He shares why execution is the only real moat in quick commerce, and how Zepto is now entering a phase of cost excellence—optimising its operations paisa-by-paisa, point-by-point basis.
From scaling order volumes and store count to shifting focus from aggressive customer acquisition to unlocking deeper wallet share, Palicha reflects on the company’s evolution, its missteps and the mindset that drives him to build with purpose—for the next 30 years and beyond. Edited excerpts:
Q. You have not only been on a funding spree, but also on a massive spending speed. Tell me some of the lessons that you've learnt from this phase of aggressive spending. How are those shaping up your capital discipline?
Look, I think publicly available data shows that last year we were doing about $1 billion in annualised Gross Order Value (GOV), which translates to roughly Rs700-730 crore per month. We were processing around 500,000 orders per day, had about 300 stores, and around 5 million monthly transacting users (MTUs).
Over the past 12 months, we’ve scaled significantly—from $1 billion to about $4 billion in annualised GOV, or approximately Rs2,700 crore per month. Order volumes have grown from 5 lakh to 15 lakh per day. Store count has expanded from 300 to over 1,000, and MTUs have jumped from 5 million to 16-17 million.
We invested aggressively in launching new dark stores and acquiring customers—spending a few hundred million dollars in the process. But we believed it was the right call, because it cemented our market position.
Even as we deployed that capital, our mature stores continued to operate profitably. If you look at the fully loaded P&L, including backend supply chain costs, some of our most mature stores are running at 6 to 7 percent positive Ebitda margins. We now have more profitable stores today than we had across the entire business at the end of last year.
So yes, we spent a lot, but we did it while consistently increasing the number of profitable stores and improving margins in mature locations. That was the thought process.
Q. So that phase is done?
It’s a good question. Right now, we’re in a position where we feel the market has reached a kind of equilibrium. Competitive intensity was high last year—and to be honest, we were a major driver of that. But today, things feel more balanced.
We’ve also never had as strong a foothold in the market as we do now. Four years ago, we were ranked seventh in online grocery. Every other competitor was larger than us when we started. Since then, we’ve moved from seventh to being one of the top players in the industry—by a reasonably wide margin.
Given that, and the current market dynamics, we believe we can now operate with more of an equilibrium mindset—focusing on long-term compounding of both volume and profitability.
Our approach over the next few quarters is to keep improving Ebitda while continuing to scale the business. But we want to do it in a more balanced way, where every quarter we’re consistently getting better. This quarter, we’re on track. Next quarter, we hope to continue that momentum. That’s broadly the thinking: We’ve scaled aggressively, we feel good about our market position, and now we want to optimise the business.
That doesn’t mean we’re any less ambitious about scale. The goal now is to compound with excellence—and hopefully, we’ll execute that well. So far, it’s looking decent.
Q. What do you think makes Zepto such a funding magnet? The so-called funding winter seemed to thaw with your raise, and since then, the momentum hasn’t stopped—even unexpected players like Motilal Oswal have come in. You’ve also been trying to bring more Indian investors on board. What’s driving this continued investor interest?
I think the only reason is because, like last year, we were able to keep growing the business 100 percent-plus year-on-year for two years straight, and we were able to keep improving Ebitda. It's as simple as that. People think that, you know, we raised a billion dollars because, 'people like my smile'.
Q. Is that true?
No, it's not true.
Q. Billion dollars for a smile, that's a high valuation for a smile...
Exactly, right? (laughs) It's simple. Investors are simple, rational people. They want to see top line growth. They want to see bottom line improve. That's as simple as that. If you do that, for two, three years in a row, you're going to get a lot of traction, as simple as that.
And so we did that for 2021, 2022, 2023 and we were coming into that in 2024 and then they said, this is high quality execution. You should start scaling aggressively. And we said, 'Okay, guys, we're clear. We're going to burn capital, but we're going to scale aggressively, and we're going to deliver growth rates that are unusual’. Like 250 percent growth at our scale last year is an insane number, right?
So we said, we're gonna burn capital, but we're not going to burn capital and give you, 'okay growth'. We're going to give you stellar growth. And so that trade-off was also clear to them.
I think we broadly delivered that, which is why we're in this position today, and now we're coming in and saying, we're going to execute over the next 12 months, improve top line and improve bottom line, right?
So, I think the clarity that these are our numbers, this is the roadmap. This is where we are on top line, bottom line, the history of execution. That has basically been the only reason why we've been able to raise capital. And we don't have, like, a large big bankroller... if you look at the consumer internet beforehand, food delivery, ride sharing, ecommerce… there were big names every year putting in huge amounts of money into companies. The point is that we don't have that, we're getting independent investors.
Q. SoftBank has not invested in you?
No. We need to consistently show the numbers. And right now, we've obviously spent a lot of capital, but over the next 12 months, we think we'll be able to show numbers that are compelling enough on both top line and bottom line.
Q. And you're looking to raise more and more..
We don't need any incremental capital now. But see, my philosophy is, whenever you have the opportunity to raise equity cash from high quality investors that you like, at good terms, you should always do.
Q. Doesn't over capitalisation become an issue?
That's true. But I think, that will be my problem. So, I'd rather have a problem that I have to solve than a problem that I'm dependent on the kindness of strangers to solve. So every time we have an opportunity to raise capital, we will raise it, even if you don't need the capital, like right now… we don't need the capital, but we've closed something. Over the next nine to 10, months, if you have an opportunity to raise capital, at good terms, from quality investors, why not?
See, at the end of the day, the game is to build a large company. It doesn't matter if it's like, I own 9 percent or 11 percent or 8 percent of a very large company. The point is just to put the company in a position where you've got a lot of equity, cash in bank, gives you optionality, gives you the ability to handle any crazy thing, externality that you were not anticipating.
Q. But when you lose so much stake, does it not affect how much of that large company that you're giving away? Does that bother you?
I think our DNA—although we might be classified differently—is fundamentally that of a professionally managed company. Yes, I’m the founder, but the mindset has always been about professional management.
If you look at some of the messy things that happen at startups, the things I’m most proud of are how we’ve handled governance and operations. For example, we’re one of the youngest companies in Indian history to close a Big Four statutory audit with no qualifications. Every time we’ve gone through financial due diligence with investors, we’ve gone into granular detail—accounting entry by accounting entry—and everything has been clean. No corporate governance lapses, no random issues. We don’t believe in that.
So the DNA is: I have to operate as a professional. I’ll be doing this for the next 30 years, and I have to treat it that way. We have stakeholders with large stakes in the business—people who are well-intentioned and operating in good faith—and I have to take their inputs seriously. My job is to serve them.
That’s my mindset. I go to every investor who’s taken a bet on us and say, ‘I’m here to deliver for you’. I don’t view it as ‘Oh, I’m the founder’. I see it as my responsibility to be a servant to the shareholders.
Q. But can you see yourself as a professional-led setup? The fact that you are a founder is bound to give you certain authority in decision-making. And you've also said that you're married to Zepto...
I think any good chief executive has that right? I'm just giving an example of a company I really admire. You look at JP Morgan Chase. You get Jamie Diamond. Obviously, he's not the founder of JP Morgan, but I'm sure if he puts his foot down and says 'I'm the CEO of a company, I think this is the right decision to make’, then any good board or good set of investors will largely default to that.
Basically, if they trust that the CEO has the right intention, is competent, is really detailed in the business. The reality is that the CEO and management teams have a much deeper understanding of the inputs of the business, and if their intentions are right, their competence is right, they're the best decision makers. Now, that doesn't mean that they don't take inputs from people, but at the end of the day, any good chief executive should be the final decision maker, in any healthy, functioning board.
So, it's less about like, founder, per se... hopefully I do an okay job as a chief executive, and I'm able to take these calls, basically, that's the thought process.
Q. When you talk about the quick commerce model, you've said that your per order cash work is 2x to 3x lower than competitors.
I think that was before we started aggressive. In this aggressive investment phase, we put capital to work, but we also grew extremely faster, so the growth rate at least last year was meaningfully higher than the industry.
Q. As a model in itself, do you think quick commerce will ever hit a point where you will not be burning cash?
Absolutely.
Also Read: Why we chose to invest in Zepto: Lightspeed's Anuvrat Jain
Q. How do you see that happening?
Look, I think we’ve had years that have proven out the economics as well. From our lens—long story short—you can expect us to keep improving Ebitda every quarter, to a point where, before the end of next year or by the second half of next year, we’ll be in a strong position on our bottom line. The reason we have conviction on that is because if you just look at the mature stores, they’re generating quite a lot of money.
That’s also why investors continue to put capital behind us—because we’ve consistently shown stores running profitably. We’re 200 percent convinced this business is going to generate significant Ebitda in the long term. Now it’s about getting it to a point where it’s stable, and then maximising scale. I’m less worried about generating a couple of percentage points of Ebitda—I want to make sure the baseline we’re doing it on is very high.
For example, if you’re generating Rs15 of Ebitda per order, you want to do that on 7.5 million orders per day—not on 1.5 to 2.5 million—because at 7.5 million orders per day, we’re talking about thousands of crores in cash flow.
If you’re doing it at a much smaller scale, maybe you generate Rs1,000-2,000 crore. But if you want to build an exceptional internet company—like what’s been done in the US, China and Latin America—then we need to push for more scale, while staying at or near break-even. That’s the thought process.
Q. In this quick commerce game, what do you think will make any one company stand out? Because everyone can do similar things, especially in many internet-related areas it's easy to copy what someone else is doing. What will give you the edge?
So right now, the only sustainable edge long term is execution. We've got two competitors who have executed well, so at an input level, it's going to be about execution.
I personally believe this this game is all about cost excellence. So, core supply chain excellence, like if we scale aggressively, you build capacity, acquire customers. But if you look at 2021, 2022, 2023, the reason why we're able to raise this capital is because we just kept relentlessly reducing our costs every month, every quarter, every year, and we're going back into that mindset now.
So, we're just going to nibble away at cost, paisa-by-paisa, point-by-point basis, and just optimise. And I think that if you get to that level of depth, and you also make the right strategic calls, where, hopefully, you're doubling down on density, using density to reduce your cost structure, and you're also optimising all the inputs in your business, not just the supply chain inputs, but even your corporate costs and your tech costs and everything… it's gonna be a 12-15-month journey, but we're gonna do that.
Q. It sounds like the Maruti philosophy. At one point, Maruti ran a campaign that it will reduce one gram from each component used in a car as part of a cost cutting. Are you the Maruti of ecommerce?
Well, I mean, I would be happy to do that. That sounds like a great thing to be… we would love to be known for cost excellence. I think we were there early last year. And then these past 12 months, we took a strategic call to aggressively scale up. And I think over the next 12 months, with all the right inputs, all the right focus, we will bring it back to that baseline.
Q. Is that in the run-up to the IPO, you need to focus more on the bottom line, profitability?
I just feel that the landscape is quite solid right now. We’ve got a great competitive landscape where you've got two of the sectorial players that are pushing us to be better, lots to learn from them. Over the next eight to 10 years, we have a large market, so all we have to do is keep optimising our cost structure. Keep giving that value back to the consumer. It is as simple as that.
And that's what we're going to focus on for the next 12 to 18, months. We've done it before. We did it in 2022, 2023, first half of 2024, and then we said, 'Okay, we need to take a break from that', because we need to scale. It's now or never right? We did that, and now we're going to go back to the cost optimisation phase for the next 12 months.
This is Part 1 of a two-part series. Part 2 will be published on 5th November.
First Published: Nov 03, 2025, 18:51
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