Will Zepto learn from Byju's?

My friends and I discuss Zepto often. There's no doubt that the company has executed brilliantly and carved a space for themselves in a heavily fought and difficult market. But will it survive in the long run? While too early to call its doomsday, there's an uncanny resemblance in the way this company is currently operating vs. Byju's that calls for some caution.

1. Dark patterns

Zepto is currently in the news for all the wrong reasons - from differential pricing basis phone type to burying hidden fees under multiple clicks. And of course, manually applying free delivery fee even on Zepto pass (think Amazon prime in contrast). Byju's was infamous for pushing loans to its customers to a point to debt.

2. Financial mumbo-jumbo

Zepto CEO and co-founder Aadit Palicha recently claimed surpassing Swiggy Instamart's GOV but still trailing Blinkit’s. I agree with Swiggy CEO Sriharsha Majety's take on this, highlighting the challenges of comparing players based on selective, unaudited financials. While it may or may not be true, there's enough on the media online that casts doubt on Zepto's financials. And, Byju's reported cases of financial and accounting practices are a case study in itself, eventually leading to its insolvency.

3. Hiring frenzy

There have been reports that the company offers salary hikes of up to 60% to draw top talent from Flipkart, Amazon and others. And, at its peak Byju's went all out to hire top tier talent from McKinsey and the likes, doling out insane salaries upwards of crores.

4. Funding frenzy

Every few days, I read of Zepto raising another round, having raised over $1.3bn since Jun-24. Sure, it needs a war chest. But, I worry that the growth backed on funding is coming at the expense of sorting out fundamentals. At its peak between Mar and Sep 2021, Byju's raised over $2bn.

5. Culture and people

Sure, the Zepto CEO and founders are young and full of passion, where work life balance might seem inconsequential. But, any rational person can tell you about declining productivity over long hours. And, while its good to have bold visions, the humility hasn't come through when the CEO talks about overtaking D-Mart in 18 months or employing more than Indian railways (largely through indirect plus plus ways) . A few months ago, a Reddit community started a poll to determine underrated to the worst startup founders in India and Byju Raveendran emerged as the worst of the lot, unanimously bashed for fostering a toxic work environment and scamming parents in the name of education (if curious, the same community voted Zoho founder Sridhar Vembu the best).

Plus, weirdly enough, the brand colours are so similar between Zepto and BYJU'S.

I do really want Zepto to thrive. But, there's some organisational rethinking that seems overdue.