Exclusive: WestBridge-Backed Otipy Shuts Operations Amid Cash Crunch

SUMMARY

The farm-to-fork vegetable provider brought down the curtains on May 17, leaving around 300 employees in the lurch

In a townhall, Otipy cofounder and chief executive Varun Khurana informed his employees that the startup cannot proceed further with its business and asked them to look for better options

Inc42 has also learnt that Otipy has not cleared pending vendor payments

Delhi NCR-based Otipy shut its operations last week, people close to the matter informed Inc42. The farm-to-fork vegetable provider brought down the curtains on Saturday (May 17), leaving around 300 employees in the lurch.

In a townhall held last Saturday, Otipy cofounder and chief executive Varun Khurana informed the employees that the startup cannot proceed further with its business and asked them to look for better options.

“It was a shock. We went to the office like any other normal Saturday, and then we were informed that our livelihood was gone. It felt like the ground beneath our feet was gone,” a former employee said.

Inc42 has further learnt that Otipy has not disbursed employee salaries for the past one-and-a-half month. Responding to questions on pending salaries, Khurana said in the townhall that the startup will try to liquidate its assets to clear the dues.

“We have to look out for a job in this tough market again. We are still processing it,” another former employee said.

Inc42 has also learnt that Otipy has not cleared pending vendor payments.

“The problems started in October last year when payments started getting delayed. Initially, the management, including the founder, used to assuage us. However, since the beginning of this year, they stopped picking our calls,” a vendor, whose payments for several months are pending, said.

The startup has also informed its customers that it is shutting operations and has assured them that would initiate the refund of outstanding wallet balance in 60 to 90 days.

Mails and calls to Khurana didn’t elicit any response till the time of publishing this story.

Founded by Khurana and Prashant Jain in 2020, Otipy, a wholly owned subsidiary of Crofarm Agriproducts, was a B2B2C social commerce platform for vegetables, fruits, dairy and other grocery items. It used to deliver the fresh produce to the doorsteps of customers.

The sudden shut down comes almost five months after Otipy was piloting electric carts in Gurugram to sell fruits and vegetables offline. Back then, Entrackr reported that the startup was targeting deployment of 5,000 to 7,000 such carts by 2026 in Delhi NCR and Mumbai.

Citing the reason behind the shutdown, one of the former employees told Inc42, “Otipy couldn’t secure the funding it was trying to raise, hence, they had to wind down operations gradually.”

As per media reports, Otipy was planning to raise $10 Mn in an extended Series B funding round. However, there is no clarity on whether the startup bagged this funding or not.

In March 2022, the startup bagged $32 Mn in its Series B funding round led by WestBridge Capital, with participation from SIG and Omidyar Network.

Overall, Otipy raised $44 Mn in total funding across multiple rounds.

On a standalone basis, the startup reported a sales of INR 160 Cr in FY24, up 68% from INR 95 Cr in the previous fiscal year. The startup also managed to reduce its loss by 28% to INR 52 Cr from INR 72 Cr it incurred in FY23.

In 2022, another WestBridge-backed startup Fraazo, which operated in the vegetable delivery segment, shut its operations.