Aadit Palicha and Kaivalya Vohra's Zepto put brakes on growth-at-all-cost as the funding winter rolled in, in 2023. The cofounder duo re-evaluated and slowly pressed down on the clutch to deliver sustainable growth backed by strong customer and economic metrics. It has made it a unicorn in an otherwise freezing funding winter that was 2023
Dude, the party is over,” a grim voice from the other side of the call broke the bad news. It was 10 in the morning, and Aadit Palicha was in the midst of crafting another speedy move to his overall frenetic land-grab strategy for Zepto. From one dark store in July 2021, the young entrepreneur raced to 150 stores, and an annualised sales of $200 million by April the next year. Notching up such numbers in a market that had more naysayers than believers, Zepto’s furious pace of growth quickly became the talk of the town.
The 10-minute grocery delivery upstart had disrupted the quick commerce market. It stunned the incumbents like Dunzo, Blinkit, Amazon and Flipkart with its hyper-aggressive growth. ‘Zepto Speed’—a term coined by co-founder and CEO Palicha to describe the breakneck speed at which the challenger brand was cruising since its rollout in early 2021—was the last brand to enter the segment, and threatened to become the biggest in the space.
From zero revenues in the first five months, Zepto closed the first year of operations at ₹142.36 crore in FY2. Though it posted a staggering loss of ₹390 crore, a bloated bottom-line was the last thing on the minds of the audacious founders and investors who were cheering up an intense land grab by entrepreneurs. Two college dropouts—Palicha and his co-founder Kaivalya Vohra—were set to gatecrash into the party of the big boys.
Back in the US, in April 2022, one of the investors in Zepto had phoned Palicha, and was talking about another kind of party. “I am serious. The party is over,” he said, trying to underline the seriousness of the situation. The startup world, he continued, was set to enter into a funding winter, the heyday of easy flowing money was over, and raising hefty rounds of funding would be a thing of the past. “You need a complete flip in your mindset. It can’t be growth at all cost now,” he delivered a piece of advice to Palicha, who was jolted out from his fairytale funding journey. “In our first seven months of existence, we raised around $300 million, which is completely nuts,” confesses the co-founder who goes on to describe the staggering pace of fundraise.
The maiden funding round of $9.8 million happened in July 2021. Around 60 days later, Zepto closed $42.4 million in Series-B. In the next sixty days, in December 2021, Palicha scooped $110 million of Series-C. Then something unthinkable happened. Just two days after the money of Series-C hit the bank, the co-founder called up one of his existing investors and shared an outrageous plan. “I want to raise capital again,” he said, explaining his logic. “This funding euphoria is crazy. It’s not going to last for long. So let’s juice out every single dollar as long as the good times last,” he reasoned.
(This story appears in the 12 January, 2024 issue of Forbes India. To visit our Archives, click here.)