How Zepto Became India’s Fastest Growing Startup

**Aadit Palicha** (0:00)
I genuinely believe we've got a once in a generation opportunity to build a world-class internet company out of India. We just had to push ourselves through some really tricky moments. We went from close to zero in scale to 200 million in six months. I would not recommend that to anybody. Really do it for the love of building. That should be the end goal. The end goal should not be, I build so I can make XYZ, I'm building so that I have the opportunity to wake up in the morning and build again.

**Garry** (0:29)
Welcome back to another episode of How To Build The Future. Today, I'm thrilled to be joined by Aadit Palicha, the co-founder and CEO of Zepto, which delivers groceries to your door in just 10 minutes. There are up to 1.5 million orders a day across 50 cities throughout India, with over $3 billion in GMV and growing 300 percent a year. And they're a unicorn at a $5 billion valuation. Aadit, it's great to see you here today.

**Aadit Palicha** (0:58)
Thanks so much for having me, Garry. I appreciate it.

**Garry** (1:00)
So when you were getting started, there were some pretty big players already in the space, Swiggy, Zomato, even Amazon was at it. How did you approach that?

**Aadit Palicha** (1:09)
When we started and we were very small, there was no sort of grand strategy or ambition, right? Again, most of it was bottoms up from users in the very early days. But, you know, looking at it now, I think the reason why we were able to make a dent and create this scale is because a lot of the people that were in the market in the early days of grocery delivery in India were trying to build its supply chain backward instead of user backward or customer backward, right? And so they would build out models that were two-hour delivery, four-hour delivery, which made sense on paper and logistically seem more feasible, economically seem more viable instead of building it retention and consumer first. The insight was, yes, let's do 10-minute delivery, but also let's build out the full stack of commerce where we were able to run the logistics, we were able to have a much better sense in selection, on quality control, and sort of that audacious thinking put us in a position where not only were we able to build a better product for users, but over time and now sort of what's playing out is that if you build a better product for users, you also end up with a better P&L and a better economics, right? So if users love the platform, your CAC is lower, the throughput you're able to get into your supply chain is much higher, your costs come down, and now we're basically seeing the economics play out pretty beautifully. Better than the two-hour and four-hour models because of how sticky the users are. So I think basically that's the dent that we had. We were just thinking first principles, the user-customer backward versus a lot of the big guys, the big behemoths that had sophisticated P&Ls and finance teams were thinking supply chain backward.

**Garry** (2:36)
I guess if you win the consumer, you can win everything.

**Aadit Palicha** (2:39)
Yeah. The big companies sometimes lose sight of that.

**Garry** (2:42)
You're 22 now, but when you were 17, you had reached out to Jared Friedman, one of our partners here at YC. Tell us about that story.

**Aadit Palicha** (2:51)
So we were just actually supposed to come here in California and study, but the pandemic hit. So the freshman year that we were supposed to have at Stanford basically got postponed by a year. We decided to take a gap year. And my co-founder and I were sitting in Mumbai, really had nothing to do, no sort of fancy internships at Goldman or anything like that lined up. So we just decided to hack around and work on a project. And it just started off as like a WhatsApp group where we were delivering groceries for our neighbors because it was a nightmare to get groceries in the first wave of the pandemic. And that slowly kept iterating as just like a fun project. And we were talking to people on Hacker News about it and just sharing updates. And I think one day we saw a post saying, get 10 minutes with our YC partner. And we said, wow, this is YC was sort of this, for two kids on the other side of the world was just sort of this mystical land, right? Where we were like, this hobby of building cool stuff, people actually do it for a living somewhere in the world, right? And so we said, wow, we'd love to talk to a YC partner. And Jad was kind enough to agree after we, I think we flooded the comment section saying that, give us time, give us time. And Jad sort of gave us the benefit. And yeah, we had, I think it was an eight minute call.