Zepto’s Ad Business Hits $200 Mn ARR as AI Push, New Categories Drive Growth: Aadit Palicha

Quick commerce platform Zepto has recorded a massive 5X surge in its ad business, reaching an annualised revenue run rate (ARR) of over $200 million, up from $40 million last year. The milestone was revealed by Zepto’s cofounder and CEO Aadit Palicha during a recent conversation with Y Combinator CEO Garry Tan.

Palicha attributed this impressive growth to the company’s robust AI-driven advertising infrastructure. “We’ve built a really high-quality, performance ad stack out of India,” he said. The stack includes advanced capabilities in relevance engine development, automated keyword suggestions, bidding, and attribution.

He also confirmed that leading advertisers such as Unilever, Procter & Gamble (P&G), and Coca-Cola are benefiting from significantly improved return on ad spends thanks to Zepto’s AI innovations.

Zepto’s AI and GenAI Playbook

Zepto is actively leveraging generative AI (GenAI) across several operational fronts. The company has integrated Meta’s open-source LLM, Llama, to build its ad relevance engine in-house—a move that has delivered notable cost efficiencies and bottom-line improvements.

Additionally, Zepto has deployed GenAI-powered chatbots for customer service. Palicha noted that over 50% of customer support tickets are now resolved dynamically through automation. AI also plays a critical role in supply chain forecasting, helping Zepto optimize logistics and inventory management.

Surviving the Funding Winter: Zepto’s Near-Death Experience

Reflecting on a turbulent period between 2022 and 2023, Palicha candidly shared that Zepto was on the brink of collapse due to a combination of factors—funding winter, the Silicon Valley Bank (SVB) collapse, and hiring missteps.

“We almost effectively could have died in that Silicon Valley Bank thing,” Palicha said, adding that incorrect hires in key departments like finance, marketing, and operations were some of his “biggest mistakes.”

He also recalled earlier days when investor skepticism toward India’s grocery delivery space almost led the team to abandon their vision. “That was probably the highest chance of death this company had,” he noted.

Tight financial controls and unwavering team focus eventually helped Zepto steer through these existential crises.

Diversification and Growth Metrics

To strengthen its top line, Zepto is diversifying beyond groceries into electronics, general merchandise, cosmetics, and apparel. The platform currently operates in 35 cities with over 700 dark stores as of the end of 2024.

The company is also seeing strong performance in terms of order volume and revenue. Earlier this month, Palicha revealed that Zepto is close to hitting a $4 billion annualised gross order volume (GOV)—a 300% YoY increase, and up 30% since January 2025.

On the financial front, Zepto reported consolidated revenues of INR 4,454.52 Cr in FY24, more than double the INR 2,025.70 Cr it posted in FY23. The company also marginally reduced its net loss to INR 1,248.64 Cr, compared to INR 1,271.84 Cr in the previous fiscal.

Also Read: Zepto Renames Parent Company from Kiranakart to Zepto Private Limited Ahead of IPO for Stronger Brand Recall

IPO Plans on the Horizon

With growth momentum firmly in place, Zepto is eyeing a public listing on Indian stock exchanges either later this year or in early 2026. Reports suggest the company is planning to raise up to $1 billion, including through a secondary share sale, indicating strong investor interest in the quick commerce space.