Another startup shuts down due to quick commerce, 300 employees lose jobs, the startup was..., business was...
(Representational image/www.freepik.com)
New Delhi: The grocery startup Otipy in Delhi-NCR has suddenly shut down its operations. This information has emerged from media reports. However, the company has not yet issued any official statement regarding this. Neither has the company commented on the reports of its business closure.
According to media reports, Otipy's founder and CEO Varun Khurana himself informed the employees about this during a town hall meeting. The company employs around 300 workers, whose livelihoods may be in jeopardy. Additionally, the company's delivery partners may also face difficulties. The company's app has also stopped functioning. It shows a message stating that there is no service in this area, no matter which location is entered.
Quick commerce the reason?
Quick commerce companies have completely transformed the market by offering delivery within 10 minutes. This has not only impacted scheduled delivery models like Otipy's but has also affected the sales of traditional grocery stores. This is considered the biggest reason behind Otipy's closure. B2B2C model
Otipy operated on a B2B2C model, where it sourced fresh fruits and vegetables directly from farmers and delivered them to customers through community resellers. The company started in June 2020 as a subsidiary of Crofarm Agriproducts. Otipy's business was running in Delhi-NCR and Mumbai. It is worth noting that the company had raised nearly $44 million in funding so far, with $32 million coming from WestBridge Capital and other investors in 2022.
Recently, the company also took a loan of $2 million from Nuvama Asset Management. Despite increasing revenue, the company reported losses. Otipy's revenue in FY24 was Rs 164 crores, up from Rs 115 crores the previous year.
However, the company was still delaying payments to employees and vendors. Otipy's closure indicates that significant changes are occurring in the online grocery segment. On the other hand, the quick commerce sector has seen tremendous growth. According to a report by Blume Ventures, this market grew from $300 million in FY22 to $7.1 billion in FY25.
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