Daybreak - Zepto to its employees — 'Who wants to be a millionaire?'

Episode Date: February 10, 2025

Over the next three to five years, Zepto wants to be known as the startup that created the most multimillionaires. Which is why these days, the standard pitch that people applying for VP-level roles at the startup get is as follows: "Would you like to create generational wealth? Think 50-100 crores in just four years." That’s what Zepto HR has been promising these applicants. They’ve been making it seem like bagging a job at Zepto is like winning a lottery ticket. And it’s not just bravado. By “generational wealth”, the company means offering Employee Stock Ownership Plans or ESOPs to senior executives, based on their performance. But it comes at a price. Tune in. Listen to 'One Billion in 10 Minutes', our new mini series based on The Ken's inaugural case competition. The Ken app Apple Podcasts Spotify

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 recording, episode, please follow intermission on Spotify and Apple Podcasts 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. Since its very inception, the quick commerce platform Zepto has been known for its unmatched audacity. Allow me to explain, this is a company that kick-started its journey in the quick commerce space with what then felt like an impossible promise.

10-minute deliveries. No one thought it could pull it off, but it did, and it also forced everyone in the quick commerce race to follow suit. And that wasn't the end of it. The company's founders, Adidt Pallica in particular, have made many an audacious claim in the past. I mean, I'm sure you remember how he confidently declared that Zepto would become even bigger than D-Mart in a little over a year.

You see, the interesting thing about Zepto is that it has consistently confounded everyone in the space. This is a company that was on a fundraising spree bang in the middle of what was widely acknowledged as a funding winter. Which is why, in 2024, while much of the startup ecosystem was wobbling, Zepto was busy hiring.

It added 2,000 new employees that year, which was a 175% jump from 2023. And that brings me to Zepto founder Adid Palichha's latest audacious bet. In an interview with a Ken, Adid said over the next three to five years, he wants Zepto to be known as a startup that created the most multi-millionaires.

I'm going to let that sink in for a second. You see, these days, the standard pitch that people applying for VP-level roles that the startup get is as follows. Would you like to create generational wealth? Think 50 to 100 crores in just four years. That is what they're. Zepto's HR has been promising these applicants.

They've been making it seem like bagging a job at Zepto is like winning a lottery ticket. And the thing is, it's not just bravado. Zepto saw its annualized gross order value triple to $3 billion in the eight months leading up to January.

And now it wants to go even bigger. Palicha wants his employees to share the spoils. So by generational wealth, the company means offering employee stock ownership plans or ESOPs to senior executives based on their performance. The example Palichia gave us was that of Ayush Agarwal. He joined Zepto's finance team as a junior accountant and ended up becoming the chief of staff within 18 months.

That's the kind of growth on offer. The $5 billion company is all set to go for an IPO by the end of 2025. But the word on the street is that there's also a very hefty price to pay. You see, Zepto has earned a bit of a bad reputation. off late for promoting a toxic work culture. The company's lofty ambitions have been known to really put a lot of pressure on its employees. So, is the generational wealth carrot enough to keep its employees happy? Welcome to Daybreak, a business podcast from the Ken.

I'm your host Rahil Filippos and I don't chase the news cycle. Instead, every day of the week, my colleagues, Nikda Sharma and I will come to you with one business story that is worth understanding and worth your time. Today is Tuesday, the 11th of February. Look at the top management at Zepto, you may very quickly notice a pattern. Most of them have some sort of e-commerce or quick commerce experience. In fact, most of them have actually held positions at Flipcut.

That, despite the fact that Palichas said the company doesn't really care about pedigree or logos on resumes. An HR personnel at the company echoed that sentiment, they said it could take as little as a smoke break to get how. hired at Zepto. Well, considering that the company hired 2,000 people in 2024, that must have been a lot of smooth breaks. But jokes aside, 800 of those 2,000 were corporate hires, including 300 engineers.

And a quick LinkedIn search locates about 2,000 employees overall in Banglor. At least 1,200 of those employees have previously worked at Flipkart or Blinket or Swiggy. In fact, interestingly, the company has also really... reportedly taken in a significant number of delivery partners from Blinket. Now, both Palicha and his co-founder Kaivalya Vora keep a close eye on hiring. While Palichita takes care of hiring at the executive level, Vora, CTO Nikil Mittal and Chandan Mehiraata, the company's chief brand and culture officer, are deeply involved in all kinds of corporate hiring.

When it comes to wages, Palichas said all employees, including pickers and packers, earn wages. above the minimum threshold, along with benefits like insurance and flexible working hours. But here's where all of Zepto's glossy narrative phrase a little. A little while ago, a Reddit post allegedly shared by a Zepto employee went viral. In it, the employee said Zepto's toxic work culture has pushed a whole bunch of people to quit. It stated that at least 10 people quit every week only to be replaced by 20 fresh hires. Now, most of the nine mid-level and senior Zepto executives, both current and former, who the Ken spoke with, actually corroborated these claims.

In fact, one of them apparently worked every day except two Sundays during Diwali. And most of the meetings with senior executives often started late in the night. The schedule left mid-level employees working from early morning until midnight most days. Belicha, of course, frames it a little differently. It's all about mutually agree. targets to earn ESOPs. He said that the company doesn't really dictate workers. Employees have the flexibility to work however long they want to

as long as they meet those targets. So far, over 60 employees have received stock options, but as audacious as this company and its founders are, they're also currently focused on sustainability, which is why they had paused hiring for a few new vacancies, at least since November 2024. Now, all of their attention is focused on the company's upcoming $800 million stock market debut. More on that in the next segment.

I have an unusual question for you. Let's say you are a quick commerce company in India and I give you a billion dollar budget that can make you win the race. What is going to be your move? Two months ago, we are some of India's brightest and most creative minds at the country's top business schools the same question. They had to pick which quick commerce company they wanted to role play as and also define what winning meant to them. This was for the Kent's inaugural case competition organized in partnership with Zeroda. Big baskets can win by leveraging the Tata brand to collaborate with Tirana partners in a cost-efficient manner. Now, winning for us is simple yet ambitious to make five-minute delivery the new normal.

So the basic core of our strategy is aggressive expansion. We don't see Flipkart becoming the Zomato, but the Uber eats of this space. If you're curious about what is going on, I am super thrilled to tell you about our latest limited edition podcast, 1 billion in 10 minutes, which is centered around the same case competition finale. Over six episodes, you will hear the top 10 strategies, all rooted in real world. and present it as game plans for five quick commerce platforms

that have changed the way we shop. Listen to the podcast series today on Apple or Spotify or the Ken app. And now back to the episode. Hiring at Zepto is all about the long game. Or so the CEO says. Sure, there are short-term roles here and there, temporary staff who aren't really on the payrolls for accounts payable, finance or property scouting

when the company needs to launch yet another dark store. But for corporate and engineering roles, it's long-term or bust. Palicha says short-term hiring just does not make sense. His point is that talent acquisition usually comes at a cost. If someone leaves in just six months, the return on investment is zero, and it ends up being a waste.

Which is why, he points out, all of Zepto's senior leadership has been with the company from the very beginning. And he's got a point. Except, the company has seen quite a few high-profile departures in the recent past. The latest, of course, was Martin Dinesh Gomez, chief human resources officer who happened to quit in November 2024. In the last 18 months, at least five high-level executives have moved on from Zepto. Right now, though, hiring isn't really on top of Zepto's do-list.

Palichas said, despite having a billion dollars in the bank, they are deliberately. deliberately deciding to pause hiring to ensure financial stability. It points to a more cautious approach of managing both growth and employee retention. Zepto is hyper-focused on growth right now. In fact, its latest move from Mumbai to Bangalore had to do with just that. Consolidating rapid expansion. So while Zepto is readying a brand new headquarters in an East Bangal suburb, it's also already piloted its medicine delivery service Zepto Pharmacy

and its even faster food delivery service Zepto Cafe in the city. Yet, behind its soaring growth and millionaire dreams lies the challenge of sustaining a demanding work culture and balancing shorter milestones with long-term stability. In its quest to churn out millionaires, Zepto still might want to ensure it doesn't also end up churning through its workforce. 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 unlocks daily long-form feature stories, newsletters and podcast extras. Head to the ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted by Rahil Filippo's and edited by Rajiv Sien.