Zepto’s Growing Pains: Why Aadit Palicha Needs More Than Capital to Reignite Momentum

Image Source : Hindustan Times

After a meteoric rise in India’s quick commerce space, Zepto is now facing a critical inflection point. Despite raising substantial capital and nearing a reported USD 4 billion in gross order value, the company’s growth has slowed, and its founder and CEO Aadit Palicha is grappling with challenges that money alone can’t fix. From regulatory setbacks to operational missteps, Zepto’s path forward demands more than just a big fundraise—it requires structural recalibration.

Here’s a comprehensive look at what’s stalling Zepto’s momentum and how the company is responding.

Operational and Reputational Hurdles

- Maharashtra’s FDA revoked the license of Zepto’s Dharavi dark store after discovering expired goods, fungal contamination, and poor hygiene
- Viral customer complaints have surfaced about hidden delivery charges and unclear billing, denting consumer trust
- Zepto Cafe paused operations in 44 stores across Delhi NCR, signaling a pullback in non-core experiments
- Allegations of unsanitary conditions in multiple dark stores have further strained the brand’s image

Leadership Reflections and Internal Reforms

- Aadit Palicha has publicly acknowledged early hiring mistakes and the impact of the 2022–23 funding crunch, worsened by the Silicon Valley Bank collapse
- He emphasized that the company’s recovery has required tighter hiring practices, improved financial discipline, and internal restructuring
- Palicha insists that these lessons are more valuable than any capital infusion and are essential for long-term sustainability

Financial Health and IPO Delay

- Zepto has deferred its IPO plans to 2026, citing a strategic opportunity to raise private capital instead
- The company is reportedly in talks with Avenir Growth and General Catalyst for a $700 million round
- Despite strong revenue growth, Zepto’s monthly cash burn reached Rs 660 crore in January 2025 before moderating to Rs 450–480 crore in March
- Employee costs remain high, with monthly salary bills around Rs 100 crore—nearly 90 percent of Swiggy’s despite a smaller workforce

Growth Metrics and Strategic Shifts

- Zepto’s ad-tech stack has grown significantly, with annual recurring revenue rising from USD 40 million to over USD 200 million
- The company is focusing on responsible scaling, prioritizing profitability and operational efficiency over aggressive expansion
- Palicha has denied rumors of large-scale store closures, reaffirming commitment to core markets and sustainable growth

As Zepto navigates this turbulent phase, its future hinges not just on fresh capital but on rebuilding trust, refining operations, and executing with discipline. For Palicha and his team, the next chapter will be defined not by how fast they grow—but how well they adapt.

Sources: Newz24India, Moneycontrol, The Arc, Economic Times, June 2025