Zepto Halts Café Operations For 80 Stores Across Six Cities Amid High Demand

Quick commerce delivery platform Zepto is shutting down 80 of its popular 'Zepto Café' stores across six cities in northern India, people aware of the matter told NDTV Profit.

Café operations have been temporarily suspended in Agra, Chandigarh, Meerut, Mohali, Amritsar, and parts of Delhi as the Aadit Palicha-led firm grapples with high demand and low output, the above-mentioned people added.

Zepto is now evaluating processes for refining kitchen software, finding new vendors for improved output, and mapping hyperlocal demand to ensure consistency across existing cafés.

While this might take some time, Café operations across the affected stores are expected to be restored by early June 2025, the people said.

Meanwhile, gig workers who were part of the affected Cafés were informed about the reshuffle of their roles in late April, where they were offered to work for Zepto's dark stores or take up alternate roles near their preferred locations.

NDTV Profit has reached out to Zepto for comments on the story.

In December, Zepto co-founder Palicha had said the company would launch the 'Zepto Café' segment after seeing a massive order surge.

"Café is scaling rapidly: we're launching 100+ Cafés a month and already clocking 30K orders/day," he had posted on social media platform X.

The new app was launched on Dec. 11, and currently has over 10 lakh downloads.

Zepto, headquartered in Mumbai, was founded in July 2021 by Palicha and Kaivalya Vohra. It recently changed its registered name from Kiranakart Technologies Pvt. to Zepto Pvt.

The IPO-bound online grocer, which recently shifted its base from Singapore to India, has been on a fundraising spree. The company has raised $1.35 billion in a span of five months.

It raised $665 million in June 2024 from Glade Brook Capital, StepStone Group, Nexus Venture Partners and others and then went on to close a $340 million round in August 2024 from General Catalyst and others. It then followed this up with $350 million fundraising from Motilal Oswal, Ranjan Pai's Claypond Capital and other Indian investors.

Zepto also recently appointed Bharti Enterprises Vice Chairperson Akhil Gupta as an independent director to its board.

Bloomberg had reported in March that Zepto was in talks for current stockholders to sell as much as $250 million of their equity, a move aimed at boosting the ownership of Indian investors before the startup seeks to go public later this year. 

"Zepto is getting close to $4 billion in annualised gross order value, which represents 300% year-on-year growth," Palicha wrote in a LinkedIn post last month. "More importantly, we have reduced Ebitda and operating cash flow burn by 50% even as we grew meaningfully during the last three months."

More recently, a workers' union alleged that a portion of their earnings was being unfairly cut by recruitment agencies affiliated with Zepto, following which the company launched a full audit into the issue.