India’s Biggest Unicorns: The secret of Zepto’s success and how it is taking the quick commerce fight to the public market

IT’S A TOUGH task to get Aadit Palicha and Kaivalya Vohra, the founders of quick commerce platform Zepto, to talk right now. The $7 billion Zepto has just filed its draft red herring prospectus (DRHP) with the market regulator, Sebi, for an ₹11,000-crore IPO via the confidential route. A confidential DRHP ensures that the prospectus details aren’t made public and allows Sebi to provide feedback privately, while allowing pitches to investors. Once filed, companies usually observe a silent period and don’t make any forward-looking public statements for fear of backlash from the regulator. That’s why Palicha and Vohra are difficult to get to. Still, as and when that IPO opens, most likely sometime this year, Zepto will become the third quick commerce player in the country to go public, after Zomato and Swiggy. Zomato, which has renamed its holding company Eternal, owns Blinkit, India’s largest quick commerce player. Swiggy runs Instamart in India’s hotly contested and fast-growing quick commerce category, which has come to redefine India’s shopping ecosystem. With over $10 billion in GMV, 30 million monthly transacting users, and 15% share of all e-commerce GMV, the quick commerce sector has scaled faster than any retail format India has seen in the last decade, according to consulting firm Redseer. The sector is also expected to grow 75-100% annually according to Bernstein Research, because of factors such as proximity, product selection, and pricing. “Five years ago, quick commerce didn’t exist in its current form,” Palicha, who is also the CEO of Zepto, tells Fortune India in an email interaction. “Many models were tested, but in 2020-21, Zepto found a clear product–market fit. We pioneered the delivery hub model, building dense, proximity-led infrastructure that became the industry blueprint.” To its credit, Zepto had pioneered and redefined the 10-minute grocery delivery model in India, which has come under fire in recent months, when its competitors were largely focussed on bringing delivery times down to less than an hour. Zepto’s success stemmed from its large network of dark stores located within or near residential neighbourhoods, enabling superfast delivery. “Early learnings shaped our focus on tight assortment, operational control, and technology-led execution,” says Palicha. “As we scaled, we invested deeply in fulfilment, supply chain, and integrated systems to deliver speed reliably.” In FY24, Zepto’s total sales, including other income, surged 117% year-on-year to ₹4,498.6 crore, compared with ₹2,077.6 crore in the previous fiscal. The net losses improved a tad at ₹1,248.6 crore as against ₹1,272.5 crore in FY23. “The quick commerce industry continues to see aggressive discounting and incentive-led irrational competition,” brokerage firm Motilal Oswal said in a recent report. Among others, e-commerce heavyweights Amazon and Flipkart are also stepping up discounting to challenge quick commerce players such as Blinkit, Zepto, and Instamart, making the competition quite intense. Overall discounts on quick commerce platforms rose to 55% in January, from 53% in November, according to a UBS report. That’s why deep pockets are of significance in this sector. Superfast success Zepto’s journey into the coveted unicorn club was as quick as, perhaps, their own 10-minute delivery. In less than two years since it first raised $60 million in funding from Glade Brook Capital, Nexus Venture Partners, and Y Combinator, the company became a unicorn in August 2023, with a valuation of $1.4 billion, after raising $200 million in a Series E funding round led by StepStone Group. Today, Zepto is well worth over $7 billion, with as much as $900 million of cash to spare in hand. “Kaivalya and I have known each other since school. With our computer science background and early experimentation, we saw the opportunity to fundamentally reimagine how India accesses everyday essentials and built Zepto,” Palicha says. At the time of the launch, Palicha says, Zepto’s focus was largely on helping the elderly with their grocery purchases in and around Mumbai. Initially named Kiranakart, the platform was launched in August 2020 during the peak of Covid-19, when lockdowns had become the norm and stepping out for groceries was a hassle. The duo took orders in a WhatsApp group and even personally delivered groceries on their bikes within 40-45 minutes. A few months later, as the business found traction, they launched the Kiranakart app and partnered with local retailers to source goods. By 2021, Kiranakart transitioned to Zepto. Before that, Palicha and Kaivalya had started GoPool, a ride-sharing app that didn’t take off. They both soon made it to the illustrious Stanford University to study computer science, only to drop out later and set up Zepto. “As we learnt more, the model evolved, but the goal stayed the same: deliver a better user experience,” Palicha says. Over the next few years, Zepto ramped up quickly, often outpricing rivals such as Blinkit and Instamart in pushing the rules of the game and, in the process, redefining the 10-minute delivery model. “The 10-minute model is often debated, but it is fundamentally about proximity and operational efficiency,” Palicha says. “We built a full-stack technology system in-house, integrating supply chain, inventory, and logistics for predictable fulfilment.” That meant a focus on strong fundamentals over short-term optimisation, and investments into scalable fulfilment infrastructure, supply chain control, and technology to deliver speed reliably at scale. “Urban consumers needed faster and more dependable access to daily essentials, and addressing that required tight control over inventory, fulfilment, and last-mile delivery,” says Palicha. In the process, as digital adoption accelerated in India, and users began valuing speed and convenience more than ever, the scope of quick commerce also began shifting from groceries to café items, fashion, and electronics, indicating a clear shift towards on-demand living. Going all out Today, Zepto is taking the fight head-on, even though its business model still relies on deep discounting. “One key learning has been that execution quality compounds,” adds Palicha. “Early decisions to own critical supply chain components, maintain operational discipline, and stay close to customer feedback created a strong foundation for scale. As we’ve matured, our focus has expanded to cost efficiency, governance, and building systems that ensure long-term sustainability.” But despite all that, since it revolutionised the 10-minute delivery ecosystem, Zepto and its competitors have faced much contempt and flak for “the inhumane treatment of gig workers, rash driving by riders, and poor pay”, forcing the Centre to intervene. Early this year, the government asked quick commerce companies to stop promoting 10-minute deliveries. Then, over the past few months, Zepto has also come under fire for relying on dark patterns and hidden fees, prompting the Centre to intervene and prohibit practices such as basket sneaking, drip pricing, and nagging, among others. In fact, India’s top consumer watchdog, the Central Consumer Protection Authority, had imposed a penalty of ₹7 lakh on Zepto for using ‘dark patterns’ and misleading price disclosures last year. Drip pricing refers to a deceptive practice in which a seller initially advertises a low price for a product, but inflates the final cost by charging additional fees at checkout. Basket sneaking refers to services being added to a consumer’s basket without their consent or knowledge. “Discussions around compliance are important for any emerging sector,” adds Palicha. “In our case, we did experiment with certain app designs and pricing structures that were not well-received. After reviewing user feedback, we acknowledged the concerns and removed those features. The changes have been in place for some time.” So, what have been the lessons so far as the company gets ready for a public listing? “A key learning from the journey has been the importance of sequencing,” says Palicha. “At different stages, priorities shift from experimentation to scale, and then from scale to optimisation. Remaining flexible while maintaining clarity on long-term objectives has been critical. Listening closely to customers, being willing to course-correct when needed, and continuously strengthening internal processes have been central to how the company has evolved.” All eyes will be on the IPO now.

India’s Biggest Unicorns: The secret of Zepto’s success and how it is taking the quick commerce fight to the public market

Sign in to read full story