Daybreak - After a year of contrasts, Zepto readies for the public markets

Episode Date: November 6, 2025

India’s quick-commerce poster child, Zepto, is racing to the public markets after a festive season high. The company clocked 20 lakh daily orders during Diwali — coming only second to Blinkit. But behind that surge lies a far more complicated story: leadership churn, regulatory heat, and a business model that’s still chasing profitability.In this episode, we unpack Zepto’s dual reality — a startup celebrating record growth while quietly firefighting internal challenges. From FDA raids on dark stores and government warnings on “dark patterns,” to its clean-up act and pre-IPO tightening, we explore how Zepto is trying to look investor-ready in a year that’s tested its resilience.Tune in.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first studio. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Just this week, reports announced at Septo, one of India's quick commerce giants was getting ready to list, possibly by the end of this month. This is after the company postponed its plans to list earlier this year. Aditya Palachia, the CEO and

founder of Zepto said in an interview that when the leadership team saw the opportunity to strengthen their balance sheet, the relatively less painful way, they took it by raising privately. He said that Zepto had seen a 200% growth and several of the dark stores had turned profitable. That boosted investor sentiment and so they ended up raising $450 million. You see, it seems like it's all looking up for Zepto. Earlier last month, they also saw a huge uptick in sales. And sales during Diwali. Now, of course, that's bound to happen for most quick commerce and e-commerce platforms, as people rush to buy gifts and other essentials as the parties and pojaws go all out. But Zepto's showing was quite impressive. In one of the most cutthroat markets, and especially

in a cutthroat season, it clocked 20 lakh daily orders, which was 40% higher than its closest competitor. It was second only to blink it, which, by the way, holds more than 50% of the quick commerce market share. But a closer look reveals that the glossy surface has a couple cracks. Because in practice, Zepto's year has been a study in contrast. A Stella Diwali showing on one hand and on the other, several operational and leadership headaches. For example, on the same day as Zepto's intentions of filing its DRHP was announced, another story broke. Turns out, several of the senior leaders at Zepto have been leaving, including the chief executive of RELISH, meet business and the chief experience officer of Zepto Cafe, among other heads.

And that's not all. Earlier this year, Zepto came under the scrutiny of the Food and Drug Administration, or FDA, after one of its dark stores in Mumbai was found operating under poor hygienic conditions. It was also catching heat from consumers on social media for their use of dark patterns. Now, to be fair, Zepto has been on a cleaner pact since then. It got rid of a lot of its dark patterns and introduced a bunch of features to retain customers. which we'll get to in detail soon. But it's also still in a loss-making phase

and still quite far behind market leader blanket. Zepto basically splits the rest of the market share with other quick commerce giants, Sviggy Instamart and other comparatively smaller players. Of course, all of this raises questions about leadership, reputation and profitability. And now Zepto is readying for an IPO, soon to be scrutinized by hundreds of investors,

analysts and regulators. all while entering a market that's already quite wary. So even as it picks a confidential route for now, while improving its internal governance and consumer relations, Zepto faces a real stress test with this listing. Welcome to Daybreak, a business podcast from the Ken. I'm your host Rachel Vergis, and every day of the week, my co-host, Nikhtash Rama and I

will bring you one new story that is worth understanding and worth your time. Today is Friday, the 7th of November. The first half of the year wasn't all that kind to Zepto. First, the Ministry of Consumer Affairs zeroed in on dark patterns. Basically, these are the UI-UX tricks that nudge users into choices they might not make otherwise. The government issued notices and advisories to a clutch of platforms, Zepto included, asking them to audit and remove manipulative patterns. At the same time, Zepto was getting consumer heat from several users for the use of its dark patterns.

In fact, Zepto has a history of being so annoying to users that there's an actual community of 4,000 plus people on Reddit called R-slash-Fuck Zepto dedicated to calling out anything unethical related to Zepto. So, you can imagine that their reputation wasn't as stellar as it would have liked to be. Then, to improve its standing with consumers, Zepto launched the swap and save feature. This feature basically saw Zepto suggesting cheaper alternatives to items already in the customer's card. Now, while customers appreciated the feature, there was just one hitch.

You see, when you tell customers to buy brand, instead of brand Y, you risk alienating the latter brand. And soon, sellers started pointing out that it would especially start hurting brands that sell premium products. So of course, while Zepto certainly couldn't continue letting customers have a bad experience, it couldn't continue angering its partners either. It doesn't look like the feature has been widely available recently. Then came the dark store raids, undertaken by the FDA in Maharashtra. Government officials reported that not only did the space contain expired products

and several products with fungal growth, the lack of care with temperature facilities had actually resulted in stagnant water around the cold storage area. It showed the cracks that formed with a high-speed model and of course it affected trust. And now, more recently, the leadership churn. As we mentioned earlier,

Chandan Rangta, the chief executive officer of Relish, stepped down less than a year into this job. This exit came soon after Shashang Shaker Sharma, the CXO of Zepto Cafe and Apurvpande, a senior VP left as well. They were both instrumental in scaling Zepto cafe. Now, while Vinay Dhanani, the president at Zepto is stepping up to lead both private labels, the churn goes deeper.

Money control reported a list of names. Senior director Anand Rassogi, business head Surat Sipani, director of strategy, Vijayabandhiya, and chief expansion officer, Roshan Sheikh, have all quit the quick commerce firm in recent firms. Especially at a crucial time like this, the exodus is bound to raise eyebrows. Add to all of this, the fact that reports speculated that while Zepto had decided to slow down its aggressive growth phase in this year,

competitors like Blinket and Swiggy were gaining more ground in the market. The thing is, Zepto is entering the public markets at an interesting time. You see, even in this booming IPO season, reports have observed that retail investors were leaning towards investing more in legacy firms, as opposed to shiny unicorn stories. Basically, they want to invest in established firms that have proven histories and clear. clear paths to profitability. So, Zepto really needs to put its best foot forward. More on that in the next segment.

Zepto has been on a real journey to make sure everything looks good before they list. It began with a domicile shift from Singapore to India early this year. Now, a domicile in India is essential for a company to list. So, once that move was announced, it was clear that a listing was on the charts. Now, like I mentioned earlier, Zepto raced privately just before they decided to list to make sure their financials would look the best it could. And almost immediately after this round, Zepto announced that it would scrap handling fees and reduce delivery charges for customers. This was, of course, a bid to boost order growth. A source told economic times that the focus is now basically on increasing order

volumes. It also wants to keep existing users loyal instead of spending on acquisition. Zepto is currently delivering around 1.6 to 1.7 million orders a day. The goal is basically to double that number every year. Over the past few quarters especially, its sequential growth has held steady at about 20 to 25%. So one of its recent experiments to help customer loyalty includes a refund slider. It basically lets customers select their preferred compensation amount. Ankit Agarwal, the chief product officer at Zepto, said in a report that the idea was to show transparency and build long-term trust by putting the power back in the user's hands. They get to decide how much of a compensation is fair, between 30 to 100%. And even though it's being piloted to a select group of users, the overall response

seems to be positive. You see, even though Zepto's revenue searched almost 150% year-on-year, from more than 4,000 crore rupees in F-Y24 to more than 11,000 crore rupees in F-Y25, profitability still remains in the horizon. While its F-525 bottom line isn't public yet, Zepto posted a loss of over 1,000 crore rupees in FI-24, which was only a slight improvement on the loss posted in FY23. Zepto has been taking measures to bridge that gap though. Company has reportedly cut 800 to 900 rolls, including both contract and permanent staff,

through layoffs and by leaving certain positions unfilled. Along with these moves, a slowdown in Zepto cafe's 10-minute food delivery operations and fewer new dark store launches have actually helped bring down its monthly cash burn to around 200 to 300 to 300-300-crow rupees from 400 to 500-c00-crow-ru-ru-reepes just a few months. ago. This makes a confidential route for filing the DRHP makes sense. Zepto can now roll out these changes

and wait for it to take hold before fine-tuning the details of its listing before going fully public. So overall, it looks like Zepto is committed to projecting itself as a leaner, more focused organisation, all while improving relations with its customers. It's one of the last big three quick commerce leaders to list as Sviggi has already listed and Blinket remains under the listed Zomato. Zepto is now basically going to show us if invested appetite for quick commerce remains as strong as it did when its competitors listed. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription offers daily long-form feature stories, newsletters and a whole bunch of premium podcasts.

To subscribe, head to the Ken.com and click on the red subscribe button on the red subscribe button on the the top of the Ken website. Today's episode was hosted and produced by my colleague Rachel Virgis and edited by Rajiv Sien.