How Zepto Became India’s Fastest Growing Startup
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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 like 200 million in like 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.

Welcome back to another episode of How to Build the Future. Today, I'm thrilled to be joined by Adit Palacha, 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% a year. And they're a unicorn at a $5 billion valuation.

Audit, it's great to see you here today. Thanks so much for having me, Gary. I appreciate it. 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? When we started and we were very small, there was no sort of grand strategy or ambition. Again, most of it was bottoms up from users in the very early days. But

But looking at it now, I think the reason why we're 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. And so they would build out models that were two-hour delivery, four-hour delivery, which made sense on PayPal and logistically seemed more feasible, economically seemed more viable instead of building it retention and consumer first.

yes let's do 10 minute delivery but also let's build out the full stack of commerce where we're able to run the logistics we're able to have a much better sense and selection on quality control and sort of that audacious thinking put us in a position where not only will we be 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 2R and 4R 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, use of 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. I guess if you win the consumer, you can win everything. Yeah, and the big companies sometimes lose sight of that. 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. 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, 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, you know, just sharing updates. And I think one day we saw a posting, get 10 minutes with a YC partner. And we said, wow, this is, you know, YC was sort of this, you know, for two kids on the other side of the world, it was just sort of this mystical land, right? Where we were like, you know, 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 like,

agree after we, I think we flooded the comment section saying that, you know, give us time, give us time. And Jared sort of gave us the benefit. And yeah, we had a, I think it was an eight minute call. We gave him a quick sense. He's like, hey, there's a company in the US called Instacart that does something similar to what you guys are doing. Maybe this could be a business. Have you ever thought of that? We said, you know, not really.

But then he said, "No, this could actually be something meaningful. Have you ever thought of applying to YC?" And that's for the first time when we thought, "Wow, I thought this was just like a project, but actually it could be something meaningful." What was the first demo like? How did that sort of come together? Yeah. I mean, the first real interaction with the customer was basically a WhatsApp group. There was an old lady down the road from where we were staying in Mumbai that was really struggling to get groceries and she stayed alone. And so we were just delivering groceries for her and she would basically say, "Hey,

You're going to this grocery store down the road. Why don't you also go to the butcher store? That was like the first interaction with the customer. And we should be able to do multiple stores. And then she started adding her friends to the WhatsApp group. And so more and more people kept ordering. But that was the early days. And then I think the first real product that we built was probably, I would say, two months after the first delivery or like a month and a half, two months after the first delivery. And at the time, it was called Kirana Card.

And it was a pick up and drop service similar to what Instacart is in the US. That prototype probably would have taken like 72 hours to build. I attribute most of the heavy lifting to my co-founder, KB. But we built it, we asked the users to move to that app and that's how it started. There was no launch moment per se. It was just like getting feedback from a customer on a doorstep and just cycling around. And that just like,

Slowly iterated into something more and more meaningful day by day But there was no like one like boom, you know, you know startup and that never actually sort of happened until We got to YC I guess the initial model for it was Karana cart and then what's the Karana for? Yeah for some of the folks watching sure no Kirana basically is the Hindi word for mom-and-pop shop, right? So it's like these small mom-and-pop stores that exist in India obviously in the US you've got more Walmart's and Costco's and Kroger's

But in India, it's primarily these small mom-and-pop shops that dominate groceries. So that's what a kirana is. So kirana cart was like corner shop delivery in a way. That's what it means. So the other thing that was very important was sort of extreme speed. So it wasn't, you know, an hour or half an hour. It was 10 minutes. How did that come about? So I think when you speak to most people in the U.S., they think of 10 minutes as like a convenience value proposition. But actually in India, it's very different, right? So, you know, if you look at...

India the overwhelming majority of consumption actually happens within four kilometers from your house Which is very different from the US right like the frequency of purchase in India is four times more for grocery than it is in in the US and

And so people actually just buying these small tickets multiple times a week, which is why most retail in India is hyper proximity. Right. So unlike, let's say, the big box Walmart, Costco models that work in like suburban sprawls, people are used to the milk delivery guy coming to the doorstep or the fruits and vegetables guy showing up outside their house every morning or the local mom and pop being 200 meters down the road. And so that's the dominant format of consumption and retail. Your 10 minutes was never really like a

you know let's do 10 minute delivery for the sake of 10 minute delivery it was more you know customers were basically telling us on their doorstep and we did a lot of the deliveries for the first few months ourselves they basically keep telling us that hey uh this is great you know it's covered but i would much rather just go to my fruits and vegetables guy uh in the morning he comes you know pretty much there why do i wait for two three hours for you guys it's not a convenience thing it's like i'm just used to buying so much more frequently so much more easier

And so that's when we sort of gradually moved shorter and shorter delivery times.

to have the ability to create that doorstep-like experience. Now, obviously at scale, the insight is that it's not just important because people are used to it, but it's a necessity because you've got a lot smaller household sizes in India, you've got a low penetration of four wheelers, you've got much more perishables that people buy, people have got lower disposable cash, so they don't actually have the luxury of buying in bulk. And so when you fit all of those consumer insights in and mainly just, again, talking to people on the ground,

you start realizing that hey this 10 minute thing is actually critical to do the way the the style of purchase that people like versus like a nice little convenience value prop so so that's how it came out but i think uh it was more just uh just talking to people

and constantly saying, "Okay, we need to reduce it every time by 30 minutes, by 30 minutes, by 30 minutes," until eventually we were like, "Let's just be at their doorstep." One of the things at YC we often talk about is do things that don't scale. Was this one of those things where you had to go and do those initial deliveries at 10 minutes and realized there's actually a palpable difference in that experience from the customer? 100%. So I think in the middle of the batch, we started getting a lot more pushback from users.

where basically we're just not seeing the retention, right? In the early days when you're delivering like in an hour. And so people would use the app, the next week, three, 4% of people would use it again. And so that's when we started talking to people and lots of things came out like selection, pricing, quality, but this was one of the big ones. And so we said, okay, we have to be at their doorstep. So what KB and I did is,

we went to one of the stores on the platform and we basically commandeered the store ourselves, right? And we ran it for a short period of time, but we did a pilot where we said, if we are able to control the customer experience end-to-end, including the delivery time, what's the reaction that we get? And so I was basically like the shopkeeper for a couple of days. KB was delivering and we could basically see that, you know,

at the customer's doorstep, there was a lot more delight. And that was obviously the subjective indicator. And then as we sort of got to a couple hundred orders with that model, we could see that, hey, people are actually repeating at like, obviously the data was not as sophisticated, but we could see the very early signs of, hey, there's these like 10 people that ordered last week, a good chunk of them are still ordering this week.

maybe that's a good thing. You did this unscalable thing. You did it yourself. You're not running around and hiring other people to do it. You're directly experiencing it. But as a result, you came to, you sort of ran it to ground and you had this like very intuitive idea about what the product needed to become. For sure. And I think that it started with like the subjective intuition, just like what are human beings telling you verbally, you know, over time it became more objective, right? Which is like, what's the retention of each cohort that we're seeing? Are

Are we seeing that repeatability? And I think that rigor of testing whether we had PMF came from the grinding we had to do at YC. YC was probably that most intense period where we learned all of these frameworks very quickly. And so Jared would push us saying, okay, you're getting good verbal feedback.

But are people really repeating? And if that's the case, then you're building something real versus just like a hypothesis. You guys also pioneered this dark store concept that now a lot of people are using. Was that also a necessary consequence of becoming a 10-minute provider? Like you needed control over what that experience would be like. Absolutely right. Like being able to control...

fulfillment and logistics was critical for us to be able to get that delivery time and SLA for the customer. But more importantly than that, you know, other people think of us as like a 10 minute delivery provider here. If you go into the ground in India, we're sort of looked at more as like a hyper-local Amazon, not just like good serviceability to the customer, but also great selection, great quality, great pricing.

across and you know today we're doing not like you know 700 800 products we're doing now almost 45 000 to 50 000 products that you can order in zapto everything from like you know oranges and apples all the way to earphones and hoodies we're basically building out and

internet supermarket chain, right? Although people sort of anchor on the 10 minute piece, though, owning the full stack logistics is also pretty consequential for all the other axioms of customer experience, right? So it's speed for sure. And then there's also quality, there's also selection, and there's also price. And so all four of those pillars of customer experience

improve dramatically at least in our experience when you're able to just like control the entire stack so i think as a result of owning it we're able to do you know 50 000 products we're able to control the entire supply chain on the back end and get better quality of produce for customers now at scale we're able to cut all the inefficiencies in the back end and give them better prices right and so all of that is at the end of the day helpful to the customer so the customer thinks of us you know 10 minute deliveries got our foot in the door

But now they're basically thinking of us as their go-to supermarket chain in India or their go-to one-stop shop. One of the blessings we had pretty early on is that, and you remember this as well, right? Very early in the company's life cycle, we got hit by March 2022 where capital markets fell off a cliff and we couldn't raise capital. And we had two competitors that had seven times the cash on balance sheet than we had. And so that was like a big forcing function, right? Like execute or die was the...

philosophy in 2022, 2023, we had to just create as much efficiency, create as much operating leverage as we could very quickly, maybe faster than a lot of other consumer internet or e-commerce companies have globally, very much early in our life cycle because it was existential.

And in retrospect, that was the best thing that could have ever happened to us because when we are now well capitalized, we're able to not only allocate that capital better, but we're able to do it more efficiently, get more growth for a lot less investment. And so essentially what happened is that we got to this point in March, April 2024, where we had gone from zero in August of 2021 to two and a half years later, we had hit about a billion in GMV.

And the business was actually pretty close back then to EBITDA and operating cash flow break even. And once we were in that point, we were able to show, hey, 70% of our markets are profitable. The most mature markets are touching 4% to 5% EBITDA. And they're turning profitable faster and faster. And we're still able to grow. But why don't we accelerate? If the economics are working, then we should actually be accelerating into the business instead of trying to cash our chips in at just a billion of GMV. We've got an opportunity to build...

the largest grocery player in India, which is a $700 billion market. And so if I'm in that position, we can easily build 20, 25, 30 billion of top line. We should be accelerating today. We should be doubling down. And that's what's basically happening as we speak. What are some of the bumps that you hit in the road? And even as a 22-year-old founder, how did you think about

I mean, holding teams to account. These are sort of the more difficult things, especially in 50 different cities. Were there cities where the numbers didn't work out and you had to find a new leader? Or did you have to react to different specific things in different cities that were surprising? I would say some of the biggest roadblocks have been people and talent related. The most fundamental input for our company is execution excellence. And the most important input to execution excellence is

is high quality talent. And so the biggest mistakes I've made as a consequence of that are the wrong hires in some cases or the wrong people management. So in retrospect, the setbacks have been, oh, you know, we could have done, you know, let's say finance better or marketing better or, you know, category management better or ops better if we had had the right person. And if you, those mistakes are very costly, especially in that 2022, 2023 period where it was existential for us. And so there were situations where we had

you know, not so much cash, you know, we almost effectively could have died in that Silicon Valley bank thing. If you remember that, right. We have a lot of our cash in, in that, in that period, those mistakes, some of those mistakes could have been very costly. And so, so yeah, like I think at a high level, um,

just getting like the right folks on board. We made some mistakes initially and now I think we've learned from them and that helped us. Yeah. Let's go a little deeper into some of the existential moments for Zepto. What are some other moments that, you know, gave you sort of the deepest lessons into building this company and, you know, coming up as a CEO? In the very early days, I think, you know, we had

uh, plenty of existential crises that the YC partners helped us through, right? That was like, like before we got into this whole first party thing, we were realizing when we did it like an intellectually honest assessment of the business in the early days that, Hey,

there's no retention here. And in this sort of pick up and drop off service, we're not able to do it well. And so we thought we were dead. And there was a point in the earliest days where we just said, I mean, what are we going to do? We've tried everything. We've killed ourselves. This was before the 10 minute moment. Yeah, this was before the first party stack. And so

this is before we started commandeering stores, right? And we said, hey, this model is not working out. You know, we thought it was going to be perfect. We'll just do this model. It's going to grow. Everything's going to be great. Got a reality check. After like a few months of like hitting the wall, we said, is there even a model that works? And like pretty much everyone was telling us,

that, hey, grocery delivery in the world has never worked really that well, other than a few exceptions. India, there was lots of companies that came before us. There was a graveyard. And so all the feedbacks we were getting from investors and from people that seemed to know much more than we did is that you guys are essentially in a dead space.

And we could see it in the data. So in the very early days, there was that like super despair period where we would have, I mean, very close to giving up, right? That would have been probably the highest likelihood chance of death that this company had. And then obviously, as we became like a larger and larger company, there were all sorts of crises, right? I mean, I think we had a, if you've been in positions where, you know, the border is capital and then a crisis happens, whether it's, you know, March 2022 and, you

the Ukraine war happened in that period, or let's say we're about to... It's funny, actually, most of our fundraisers have coincided with some sort of crazy crisis that's happening, right? And it has actually made it harder, right? Like I think right before we raised that round in 2023, which was like a fundraise from hell almost, right? Because it was like the only unicorn round in India for that year. Immediately prior to that, the Silicon Valley Bank thing happened. And so to raise that round took like eight months, seven months. Within that, I mean, like,

there were lots of places that we could have died in that were real. Like there was a period where we had to build a lot of financial controls, right? Like we had to go through like EY audits that, you know, if we didn't make it through them as tightly as we would have wanted, we would have, you know, not gotten capital, right? And when you've got competitors with over a billion dollars of cash in bank, it's existential, right? And we didn't want to sell. And so we just had to like

push ourselves through some like really tricky moments there but there's probably plenty more still to happen right i'm sure i think uh the really cool part of your story is that um you know you didn't look at sort of how other people were doing it

and I sort of accepted that as, you know, sort of ground truth. There's an ex maxim now that is, you know, you can just do things. So I see a lot of you can just do things energy in what you're talking about here. I mean, it's a little bit of being naive and young that helped actually. Like, you know, it's like they say, right? Like if you knew how hard it was when you started, you wouldn't have done it, right? And so...

That's the Paul Graham "Slept Blindness" essay in a nutshell. So you've personified it. I really like how you thought about retention. Did it feel like you were just asking questions about that? And out of asking questions, why is retention

not where it could be. That sort of teased out, well, we could try this, we could try that. Were there a few other things you tried other than the 10-minute thing? Yeah, we did. We tried to build a SaaS model for mom and pop shops. We tried to build a B2B logistics play. Is there a better model? Maybe what if we just do only the delivery part or what if we only do the software part? And we just realized that grocery in India can be much better than it is in general as a

as a market and like we realize that everything is so broken right like whether you go into the back end you go to the the storefront you go to the the delivery in the last mile if you want to build something that really solves the problem end to end for the customer which is across like speed quality assortment and price then you just need to suck it up and own the whole thing the push basically came from uh

lot of just like radical candle right and I think that you don't really find a lot of that you know candidly in India so far which is why obviously what YC was as valuable as it was because you know people were just like you know brutally honest with us that hey man you want to make it you want to build it's instacart you want to build DoorDash you want to build like a nice consumer intent company this is what the early days of those guys would have looked like obviously they went through their own struggles but you're not not you're not at a point where it's

you can get a weekly and product market fit and then having that like really brutally honest uh feedback Loop really helped us and then we sort of pushed ourselves to say okay if you're being super honest ourselves are we building an exceptional product right sure maybe we're getting a little bit of a pop in the early days because it's covered people are locked down they have to use the app but can I really say that build something that somebody actually wants long term uh

And until we had conviction that we were there, we didn't go all in. It was just like a great feedback loop and like a lot of tolerance for iteration and pain, basically. Talk to me about that moment where you did feel like you got product and market fit. And that's when...

know maybe you were in only on one location and then you said okay time for you did you do one additional location or did you say all right like five locations like what was that like it was actually the first location the first dark store we launched is in a neighborhood in mumbai called bandra and pretty quickly that neighborhood became bigger for us than the rest of the entire city that we were operating in and it just sort of ballooned and i remember going there because it was an experiment right and it was like effectively it was like a cardboard uh

cardboard cutout almost of like what a dark store looks like today because now dark store is like you've got proper racking and and you know chillers and freezers and everything all set up properly but over there just like a bunch of like stuff on the ground basically and we were just living from there but the experience was so well managed because we were able to you know curate a very good selection right and work with a couple of people to be able to do that we were able to get the deliveries consistently and so just started picking up very rapidly and

long story short, I mean, I did a couple of deliveries and I was like, wow, people really have a spark in their eye when they're getting like a delivery here versus like what I'm used to, which is, oh, this is bad. This is bad. Delivery's delayed. Items are not right. So yeah, I think that was like the aha moment. And yeah,

That is also when we got lucky to just keep getting the right mentor at the right point in the journey. And so that's when our series A investors, which was Nexus in India, basically came and said, hey, this is real product market fit, probably. And we said, I mean, are you sure? We were very cynical. That's when I think the right time at the right place, we met the people that gave us the conviction that,

you know, you can actually try this again in the second store, try this again in the third store. And that's when it started just really picking up. We went from basically like close to zero in scale to like 200 million in run rate scale in like six months. And like, I would not recommend that to anybody ever again. It caught fire. Like people really wanted it. Yeah. Like pulling the product out of you. Like when are you coming to my neighborhood? Yeah. And even like just even, I mean, obviously it's 2021, so it's crazy, right? But even from a capital perspective, we went from like,

effectively the 125K from YC to like a $9 million round to a $50 million round to a $100 million round in like four months. And that was obviously crazy back then. In hindsight, it was probably the right thing because that was like sort of the inflection point to just go all in on. And then in 2022, we stabilized and said, okay, let's start building a business out of this. I guess given that, like, do you consider Zepto a success? No, absolutely not. Like, I mean, not even close to it. I think we've got...

couple of decades before we can realistically say that we've won. I genuinely believe we've got a once in a generation opportunity to build like a world-class internet company out of India and you know sitting in places like this you get really humbled because you realize that wow like look at the kinds of quality of companies that have been built in the US and in other parts of the world and I don't think we're there yet and until we can credibly come in and say that hey we're able to hold our own to some of the best

globally like an Amazon or a DoorDash or a MercadoLibre or all these other companies, then I don't think we've won. I also think that the ambition is less about like, oh, this valuation, this, that. It's now come to a point where you just really want to build something exceptional that can be like a benchmark for the rest of the ecosystem. So I think it's going to take 20, 30 years to get there.

We are very excited to do that for the next 20, 30 years minimum and then much more. And we just have to execute like crazy to make that happen. So that's what we're trying to do. People are always overestimating what they can do in one year and way underestimating what can happen in 10 or 20. Yeah, 100%. So you once tweeted, nothing against work-life balance. In fact, I recommend it to all our competitors. Yeah.

Stupid idea. I think about that often. I mean, I think it is possible to have balance, but you know, you can also do, you can run your work like a really good marathon. Yeah, yeah. Oh, for sure. You know, I think the, for the people that like work at a company like Zepto, I'd say that, you know,

Join here if you're really looking to do the best work of your life, right? And like, this is the place that is going to get that out of you, right? Because it is a very execution-focused culture. Everyone is really deep into the game. When you're just like in these super execution-focused cultures, then, and you're really like accountable for real problem statements every day, you can actually just become like the best version of yourself. And I think the, it's not for everybody, right?

that sort of mindset and thought process, but it is for the super ambitious, the super capable that really want to get the best out of themselves. And it's not forever, right? You're not gonna have to do this work so hard for many, many decades, but you definitely need, I believe, portions in your life where you take yourself to the maximum and really achieve a lot.

I think Zepto is sort of that place. It doesn't feel like work, at least for me. And I know that that's not a realistic expectation for today. We've got like 3000 plus corporate employees, right? And mainly ops folks, but like with 3000 people, I know it's not realistic for me to tell everyone that, hey, you know, love what you do, work seven days a week. It's not realistic, right? But at least for KV and I, I mean, just, it feels like the journey of a lifetime, right? And like, there's nothing more exciting than this to be spending time on. So,

That's, I guess, the thought process. But what I will say though is if you don't really have a mission that excites people, then you can't push them to that level to really give them their all. And I think that SpaceX is a good example of a company that is just able to get the maximum out of people because it's such an inspiring mission. Obviously, we're not sending rockets to space. We're delivering groceries. But I think that the mission that at least I like to

try to bring out is that guys let's build like a truly great internet company in India and let's like kick off the internet revolution in India that should have been much bigger than it is today I mean I think we can

I think we can create 10x more value for the country than we have so far. I think, I mean, if you look at even like places like China, right, the dynamism came from the internet companies and then that spread everywhere, right? So maybe we can play a small part in that. That would be great. What are some of the unique advantages and challenges you've experienced building a startup, you know, specifically in India? So I think the advantage is that the talent is incredible, right? And I initially didn't...

realize this deeply but

We interviewed American engineers and obviously they're exceptional, but we said, "Hey, the guys that we have are as good." And I think a lot of people underestimate that. That's why a lot of great internet startups set up offices in Bangalore and hire people there. And so the big advantage is that you just have such an incredible talent base and really, although it's very competitive, it's still a lot less competitive to get such high quality talent than it would be sitting in San Francisco, I'm sure.

I think some of the hurdles are as an ecosystem. I think we're like very much like post 2001 right now, because we had like a big reality check in 22, 23, and there's still a lot of fear and lack of ambition in general. And I'm sure you, you know, you, you've seen some of that, like in the post or one kind of period, right? I'm sure, uh,

where people were less ambitious than they could have been. So we're sort of coming out of that and saying, you know, guys, why we, you know, if we execute well, we should go, we should swing for the big leagues. And so I think the challenge is like, whether it's hiring a senior executive, whether it's, you know, bringing on board a new board member, I feel sometimes, and sort of Scavalier, like a little bit in the minority camp where we're saying, it's very easy to be at like three, four billion of GMV and just take it,

take it easy, right? And just get to break even and then build a nice little company, go public, you'll do well, right? But wouldn't it be much better to go for

5x that, 6x that, and if the opportunity is there, why not go for it? And so I think in the US, that mindset is sort of taken for granted. Everybody has that here. And it's such a special place because of that. But in a place like India, it's still germinating. I mean, I think you're one of the leading importers of the philosophy itself. Yeah, hopefully. We've got the talent. We just need to get that mindset, the dynamism, basically. What else do you have on the plate and sort of

in your vision for Zepto over the next 10, 20 years? I think from our perspective, there's a lot of areas to innovate in like Indian consumer internet. And we want to, I mean, we don't want to get distracted where we just, you know, try multiple verticals. Like we really want to just go deep into the compounding flywheel that we have a product market fit and say, how do we just keep improving our product market fit? I believe that PMF is like, it's a, it's a, it's not static, it's dynamic, right? You can keep improving it over time if you keep innovating. And so

there are like a few exciting innovations we're working on. So for example, there's

Zepto Cafe, which is basically first party food delivery that we've now started to build into our dark stores where in like a three and a half thousand square foot facility, we have 250 square foot that's allocated for coffee, tea, snacks. Like if you've been to 7-Eleven in Japan, for example, or even in the US, you have all that. Amazing in Japan, not so good here. Yeah, yeah, yeah, exactly. Right. And so it came from the same inspiration. Can we build that out there? And that's doing phenomenally well. So we've scaled that

effectively starting last year and we've gone from zero to over 100,000 orders per day. And that's the beauty of all these consumer internet businesses, right? When you have like 15, 20 million people opening your app every week and then you add like a new little use case for them, you can just funnel hundreds of thousands of people

just by moving pixels around. That's like the super exciting thing about this business. That's why I love it so much. Sounds like it's the true everything store, but it's not only just the everything store that will come to you tomorrow or maybe later next week. It's literally in 10 minutes. Yeah, it's like the hyper-local everything store for hyper-local India. That's the idea. But there's a lot of other cool stuff. I mean, even if you look at our advertising business, similar to like

other really successful e-commerce companies, we've gone from like a 40 million ARR in ad revenue last year to this year, we've just crossed 200 million ARR, right? And that's just, I mean, it's,

obviously phenomenal business and we're just innovating there in an exciting fashion. We built out like our search stack in-house, the entire relevance engine, bidding, attribution, campaign management, automated keyword suggestions. I think we've built out a really high quality performance ad stack out of India for one of the first players to have actually been able to do that. Obviously Flipkart and a few other folks have done it.

but we built it really quickly and it's giving us a lot of value and that business is also scaling. So ads is another big focus, cafes are a big focus and it's all sorts of other stuff. And we're starting to get into electronics as a category, general merchandise and apparel, cosmetics. So we're just getting more and more into

as many use cases as we can find and all of it is user backward. And so I basically spent time with the team looking at, hey, what are people searching for that we're not able to give them? And then let's start adding those use cases. So when people started searching for coffee, we said, let's

put in Zepto Cafe when people started searching for lipstick, we said let's start adding cosmetics. So that's the flywheel is spinning as a result of that where we're getting better retention and we're getting a better P&L end state as a result of that and there's a lot more to push on that. So very early but I think we could you know maybe we'll be talking hopefully if we execute well big it's a big if but if we execute well a few years from now we'll be talking about a new form of e-commerce that we've sort of invented

of India and I think the Chinese guys were able to invent new forms of e-commerce too, so why can't we? Going through your description of how Zepto works in India, it actually sounds way more awesome than what Amazon is doing. Amazon tried to do some of these faster delivery type things. They scaled them back. We don't know if we'll ever actually even see them. If anything, it's

heartening and pretty exciting for the Indian ecosystem in that there is this very powerful energy where you can just do things and it's alive and well. It's happening in the other side of the world too. So we're in this age of intelligence as Sam Altman calls it and I'm a deep believer in that. What are you seeing at Zepto? So the way that I look at it is we're like a very nascent internet native company and we

I was actually talking to someone senior at Microsoft yesterday and he gave me a really good framework, which is on the, we're basically the application side of the AI acceleration, right? And if I have to figure out what applications I need to prioritize, because in the end, all the applications are gonna be fully fleshed out either through agents or something else that I don't know, right?

But my job right now as CEO is to say, okay, what are the applications that I need to expedite that I need today that are core to my business? And what are the applications that will probably come out on their own and are non-core to my business, but I'll use them, but are non-core to my business. So for example, let's say non-core would be accounting, right? Can I make my accounting 10 times more efficient, 10 times more accurate? Eventually 100%, there'll be an agent that does that for me. Can I make my...

my legal contract work that I do at scale, can I make that much more efficient? Absolutely, I can. We have a lot of that stuff that we have to do in India. But those are not really core. And someone is going to solve that for me later. And I'll pick up an agent

whatever is you know much more than I do right a year from now or nine months from now and I'll solve that problem but today what I'm focused on on the application side is what are the things that are super core that I need today and I will build some of that keep not I'll build some of the capability in-house to be able to apply that as soon as possible to my business as an internet native company and so for example let's say the ads business that I was talking about right so automated keyword suggestion for example or bidding an attribution

we were able to get much better return on ad spend for our clients on the ad side, like Unilever and Procter & Gamble and Coca-Cola. We were able to do that because we started training on Lama

to try to build out a better i mean to basically build out the relevance engine in-house and that gave us much better results and we were able to search the ads businesses and run to that so that had a big impact on bottom line or for example the easiest application that everyone knows is customer support and now that's obviously playing out but we said we need this customer support stack much quicker so we've built out like a crack team that's again training on some of the foundational models looking at all our data let's say like

rotten bananas for example because we do one and a half million orders per day so there'll be rotten banana there'll be delayed order or there'll be all those sort of customer support tickets i'm basically saying let me just train this model myself or whatever let me use what exists out there and give them my data and build out an application for myself and start automating every ticket and so today

you know greater than 50 of the tickets that are raised on zepto not just like a rules-based chatbot are actually solved dynamically by a generative chatbot that's been modified for our exact use cases right so we'll focus on these key things like search ads customer support forecasting supply chain forecasting another core part of the business we built a lot of

not generative AI, but a lot of deep machine learning work that we've done there. That's exciting. I mean, I think one of the observations is that basically these are not solved problems yet, and that's actually exciting.

and/or even this idea that you could do the everything store across every category and you can basically snap your fingers and add almost any new category. All of these things are actually empowered by the technology themselves and those are coming at a more and more rapid pace actually. Maybe to wrap things up, I guess my favorite question often is what advice would you give the 17-year-old version of yourself?

And it was not too long ago, but it feels like in founder terms, you know, the founders live many, many lifetimes every single year. So what would you say to that person right now? When I started, I was still a little bit extrinsically motivated, but I didn't really internalize that or like I'm doing this just purely for the love of building. And then that

is sort of the maturity journey that I've been on when I think the first year or two years or three years of the company when everything was breaking and we were going to die multiple times, right? At that point, you just basically have a gut check where like, what are you really doing this for? And if you're doing it for

you know, money or, or like, you know, or, or fame or all this other nonsense, then there are far easier ways to do that. And I joke with my team, like, you know, there's far easier ways to make a buck than to build this crazy contraption. Right. But yeah, so I would basically tell them that, you know, 17 year old version or whoever else watching this, that like,

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 or I can get ABC out of it. But I'm building so that I have the opportunity to wake up in the morning and build again. And that's basically the mindset that I'm in right now. Every day I just wake up and I'm like, wow, I'm so excited for the next problem statement. And so it's just great. Adit, thanks so much for spending time with me today. This is awesome. Yeah, likewise. Thanks, Gary. It was great talking to you.