WestBridge-Backed Otipy Shuts Down Amid Severe Cash Crunch

According to those familiar with the situation, Otipy, situated in Delhi NCR, ceased operations last week, as reported by a media outlet. On Saturday, the farm-to-fork vegetable supplier shut operations, leaving about 300 workers struggling to make ends meet.

Otipy cofounder and CEO Varun Khurana told his staff during a town hall on 17 May that the startup is unable to continue with its operations and encouraged them to find a better alternative. It was shocking, according to a media article that cited a former employee.

 Like every other Saturday, employees went to work. They were subsequently told that they had lost their source of income. The ground beneath their feet seemed to have vanished. Additionally, a media report has discovered that Otipy has not paid employee salaries for the last 1.5 months.

 In response to a question about this in the town hall, Khurana stated that the business will attempt to sell off its assets in order to pay off all outstanding debts.

Vendor Payments Not Yet Cleared

The Otipy has yet to settle outstanding vendor payments, according to a media report. One of the merchants told a media outlet that the issue began in October of last year when the payments began to be delayed.

At first, the founder and other members of the management would reassure us, but since the start of this year, no one has answered their phone.

In addition to informing its clients that it was closing, the business promised to start the refund process within 60 to 90 days. Otipy was testing electric carts to sell fruits and vegetables offline in the Gurugram area for over five months before the abrupt shutdown.

At the time, Entrackr stated that the business aimed to deploy 5,000 to 7,000 of these carts in Mumbai and Delhi NCR by 2026. Additionally, the news portal discovered that the business was also experimenting with the rapid commerce model.

Otipy, a B2B2C social commerce network for fresh produce, including fruits, vegetables, dairy products, and other food items, was founded in 2020 by Khurana and Prashant Jain and is a division of Crofarm Agriproducts. It is a Crofarm-owned stepped-down subsidiary.

Funding Rounds Till Now

Otipy intended to raise $10 million in a lengthy Series B investment round, according to media reports. It is still unclear, though, if the business was successful in obtaining this cash. The firm raised $32 million in a Series B fundraising round led by WestBridge Capital in March 2022, with SIG and Omidyar Network also participating.

The business has raised $44 million so far in many rounds of funding. Otipy's sales in FY24 were INR 160 Cr on a stand-alone basis, which is 68% more than the INR 95 Cr it recorded in the prior fiscal year.

Additionally, the firm was able to cut its loss from INR 72 Cr to INR 52 Cr, a 28% decrease from the previous year. Crofarm has not yet submitted its FY24 financial statements. Fraazo, another WestBridge-backed business involved in vegetable delivery, has already ceased operations.