How Zepto Became India’s Fastest Growing Startup

Palicha says Zepto began by listening to users rather than designing around what seemed easiest for the supply chain. Early grocery delivery took hours, but customers wanted a dependable doorstep experience that matched India’s frequent, small purchases. The team started with a WhatsApp group, then built Kirana Cart, a pickup and drop service.

When only 3 or 4% of early customers returned the following week, Palicha and co-founder KB ran a store and handled deliveries themselves. They saw stronger customer reactions and early repeat orders with faster delivery. Zepto used customer conversations alongside cohort retention to test whether the product was working.

Palicha says Zepto’s dark stores gave it control over delivery time, product selection, quality, and pricing. He describes the company as an internet supermarket, with roughly 45,000 to 50,000 products, rather than just a 10-minute delivery service. In its first Bandra dark store, Zepto saw demand grow quickly and expanded after mentors and investors helped validate the product-market fit.

After capital markets tightened in 2022, Zepto focused on efficiency while competitors had much larger cash reserves. Palicha describes early doubts about retention, fundraising delays, and costly hiring mistakes, including a period when the company came close to giving up. Once the business approached break-even, with 70% of markets profitable, Zepto chose to invest in growth; its GMV rose from near zero to about $200 million in six months.

Zepto is expanding into food through Zepto Cafe, as well as advertising and additional retail categories, based on what users search for. Palicha says the company builds AI applications for core needs such as ad relevance, customer support, and supply forecasting; he reports that a generative chatbot resolves more than half of support tickets. His advice to aspiring founders is to build for the satisfaction of solving the next problem.