Zepto's ‘generational wealth’ narrative has started to crumble

Today's episode of Two by Two is about Zepto’s decision to pause its IPO and how things will play out next.

For years, Zepto has told one story — about its potential: for growth, for profitability, for making money for everyone from investors to employees. And to be fair, Zepto executed at a blistering pace. But the story always ran on momentum, on a sense of inevitability. And the reason why Zepto told that story again and again, with bluster, is because the company always knew the truth: there was exactly one destination.

For Zepto, going public wasn't a milestone. It was the endgame. And it came within inches of pulling it off.

Now, Zepto and everyone in and around its massive orbit — shareholders, vendors, delivery partners, employees — will acutely feel the gravitational pull of the same momentum that propelled it up. And the way down, like the way up, will be driven by narrative. Except it'll be a counter-narrative this time, and perhaps just as irrational. The confidence narrative has two sides: thus far, Zepto has been climbing ladders, and now it's going to encounter snakes one after another.

This episode is a bit different from Praveen reading out the special newsletter edition he published last week, with some help from Snigdha, who co-hosts Daybreak, The Ken's daily news podcast.

In this episode, Praveen plays out what the way down looks like — why India's largest mutual fund houses took one look at Zepto's valuation and financials and passed, why brands and creditors will become a lot more unreasonable, and the three outcomes from here, all of which look tricky. And after he published the newsletter, he got a wave of theories from subscribers — founders, leaders and executives among them. He reads some of them out.

The market has learned. Now we find out whether Zepto can.