Zepto Ad Vertical’s ARR Grew 5X In A Year: Aadit Palicha

Quick commerce major Zepto cofounder and CEO Aadit Palicha said that the company’s ad vertical managed to grow its annualised revenue run-rate (ARR) 5X in the past year. 

In a chat with investor and incubator Y Combinator’s CEO Garry Tan, Palicha said that the quick commerce platform’s ad business “just” crossed the $200 Mn ARR milestone compared to $40 Mn ARR last year. However, he did not elaborate on the timeline. 

“If you look at our advertising business, … we’ve gone from like a $40 Mn ARR in ad revenue last year to just crossing $200 Mn ARR.. 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,” said Palicha. 

The Zepto CEO also said that the quick commerce platform is focussing on new categories such as electronics, general merchandise, apparel and cosmetics to further shore up its top line. 

Zepto’s Near Death Experience 

Speaking with Tan, Palicha said the “existential” period between 2022 and 2023 almost led to the company’s demise. Speaking about the time period, the CEO said that the funding winter, the Silicon Valley Bank (SVB) collapse and certain hiring mistakes almost brought the quick commerce platform to a near-collapse. 

Palicha also attributed some of his “biggest mistakes” to wrong hires, especially in areas such as finance, marketing, category management and operations. 

“In retrospect, the setbacks have been (that) we could have done… let’s say finance better or marketing better or you know category management better or operations better if we had the right person. Those mistakes could have been very costly especially in that 2022-23 period where it was existential for us… and we did not have so much cash… We almost effectively could have died in that Silicon Valley Bank thing..,” added Palicha. 

The Zepto cofounder also noted that the quick commerce platform faced “plenty of existential crisis” in the early years of its operations (before it pivoted to the 10 minute model) due to low retention and feedback from the investors that the grocery delivery ecosystem in India was a “graveyard”.

“So, in the very early days, there was that like a super despair period where we were very close to giving up and that was probably the highest likelihood (of) chance of death that this company (has) had,” added Palicha while reminiscing about Zepto’s early years of operations.

He, however, underlined that what helped the company move ahead was tight financial controls and pushing the team through ”really tricky moments”. 

Zepto’s GenAI Push

Elaborating on how the company is leveraging GenAI in its operations, Palicha said that the quick commerce platform leverages artificial intelligence (AI) to automate aspects of its ad business such as bidding and attribution. 

This, he claimed, has helped its advertisers like Unilever, P&G (Proctor & Gamble) and Coca-Cola get “much better return on ad spends”.

He also said that the company deployed Meta’s open source large language model Llama to build the relevance engine for ad business in-house, adding that the move had a big impact on Zepto’s bottom line.

Palicha also noted that the company has been deploying GenAI to automate its customer support, adding that more than 50% of customer support tickets raised on Zepto are “solved dynamically” by its in-house GenAI chatbot. Besides, it also uses AI for supply chain forecasting. 

Founded in July 2021 by Palicha and Kaivalya Vohra, Zepto claims to deliver groceries and other items within 10 minutes. With operations spanning 35 cities, the startup had more than 700 dark stores under its belt at the end of 2024. 

Earlier this month, Palicha said that the quick commerce major was close to clocking $4 Bn in annualised gross order volume (GOV), up 300% YoY and 30% since January 2025. 

On the financial front, Zepto managed to double its consolidated revenue to INR 4,454.52 Cr in the fiscal year 2023-24 (FY24) from INR 2,025.70 Cr in FY23. It also trimmed its net loss by a marginal 2% to INR 1,248.64 Cr in the fiscal under review compared to INR 1,271.84 Cr in FY23. 

Meanwhile, the company is also eyeing a public listing on the Indian stock exchanges later this year or early next year. In January reports surfaced that the company was looking to increase the size of its public issue to up to $1 Bn, including secondary share sale.