Zepto CEO Defends Indian Startups Against Criticism

Aadit Palicha, the CEO of Zepto, is a strong advocate for the role of consumer tech startups in driving innovation and economic growth. In a recent interview, Palicha made the case that the work being done by Zepto and similar companies is pushing the boundaries of what is possible in the realm of consumer technology.

Following Union Minister Piyush Goyal's critical comments about the Indian startup ecosystem, Aadit Palicha, co-founder and CEO of Zepto, has stepped forward to defend the contributions of consumer internet companies. Palicha's detailed LinkedIn post goes to a place that deserves being the focus of this post: Palicha pushes back against the notion that Indian startups lack for deep-tech innovation. He highlights the role of the consumer internet sector in job creation, economic development, and technological progress.

Goyal’s Criticism Sparks Industry Debate

At the event of Startup Mahakumbh, Goyal offered a suggestion that many Indian startups are focusing not on deep-tech innovation but rather on turning unemployed youth into cheap labor. This, he charged, is harming India's potential as a startup leader. He contrasted India with countries like China, which are achieving significant things in areas like artificial intelligence, robotics, and next-generation manufacturing.

Palicha countered Goyal's assertions with real-world examples, pointing out that Zepto, a company that did not exist three-and-a-half years ago, now provides livelihoods for 1.5 lakh people. He further highlighted Zepto's economic contributions, stating, "Over INR 1,000 crore of tax contribution to the government per year, over a billion dollars of foreign direct investment brought into the country, and hundreds of crores invested in organizing India's backend supply chains, especially for fresh fruits and vegetables. If that is not a miracle in Indian innovation, I honestly do not know what is."

The Role of Consumer Internet Companies in Innovation

Palicha contested that some of the world’s most groundbreaking technological innovations emerged from consumer internet companies. He named Amazon, Facebook, Google, Alibaba, and Tencent as examples of companies that began as consumer internet firms but later became deep-tech pioneers in artificial intelligence, cloud computing, and other domains. “Why doesn’t India have its own large-scale foundational AI model? It’s because we still haven’t built great internet companies,” he said.

Palicha also assured that Zepto’s long-term vision is to reinvest its earnings into further innovation and value creation within India. The post concludes with: "We have the talent and capital; we just need the execution."

Goyal's comments drew sharp retorts from industry leaders like Palicha and former Infosys CFO Mohandas Pai. Pai also went on social media to question: what has the government done to support deep-tech startups? Pai highlighted the many obstacles that these startups face. He pointed to taxation as one huge problem, and he called attention to what he sees as a paltry attempt by the government to engage with institutional investors.