That’s too much trouble for too little business, one might think. Khurana thought otherwise.
The problem appeared to him as a window of opportunity: to reduce wastage in the fresh produce supply chain and create value for both farmers and consumers. Besides, a farm-to-table fresh produce venture could be a high margin business. Because what farmers sell for ₹10 per kg is often sold to consumers at two to three times the farm-gate price. So why not give it a shot? Bypass the many intermediaries in the supply chain, work closely with farmers on quality improvement, and deliver the finest produce to consumers.
A few years later, in early 2020, Khurana founded Otipy. Soon after, a pandemic-induced reset in consumer behaviour, fuelled a rush of venture capital. In less than two years, the startup raised an enviable $44.2 million from a flock of investors like WestBridge Capital, Inflection Point Ventures and SIG Venture Capital, among others.
In 2021 and 2022, agri-tech (ag-tech) startups received nearly $2.2 billion in venture funding—a phase now reflectively seen as “over-exuberance of speculative capital”.
The closure
The name Otipy was chosen to convey a sense of genuineness and trust to consumers—a play on one-time-passwords or OTPs that are required to authenticate financial transactions. At its peak, sometime in mid-2023, Otipy delivered 30,000 orders to consumer doorsteps every morning in Mumbai and the national capital region. Between 2022-23 and 2024-25, its annual revenue rose by 50%, from ₹115 crore to ₹172 crore. The cash burn, startup lingo for losses, fell by 60%, from ₹90 crore to ₹35 crore.
Then, on 17 May 2025, quite abruptly, Otipy shut operations. It ran out of cash after a $10 million fundraise expected in February, from a new investor, a family office, did not come through. Existing investors were reluctant to infuse funds, wary of the growing footprint and popularity of quick commerce platforms, the likes of Zepto, Blinkit and Instamart, even though these did not specialize in perishables.
“Somewhere around June last year, our cash flow challenges started,” Khurana wrote in an email sent to investors on 23 May. “While I remain deeply committed to the company and would love to keep it going, continuing without fresh capital is simply not feasible…,” he added.
“I believe the changing funding environment and the impact of quick commerce also made it difficult to raise capital. While we brought down our burn to less than ₹2 crore a month, it was still more than what the market expects at this time,” Khurana further wrote.
It was not that consumers stopped ordering on its app, the founder told Mint over a phone call last week. It was the fear of quick commerce which triggered a turnaround in investor interest.
Quick commerce offered consumers the convenience of super-fast, 10-minute deliveries, compared to the seemingly arduous task for an Otipy user to place an order before midnight and receive delivery the next morning.
Khurana added that he is trying to raise funds to restart operations. Meanwhile, the entire senior leadership has left the company. Consumer complaints regarding unspent wallet balance have surfaced on social media. The founder said those will be refunded within 90 days from the date of shut down (17 May).
View Full Image
The write-off
Unless a miracle happens, it’s a write-off for us,” said an advisor at a venture capital fund which was among the early investors in Otipy. The person did not want to be named.“Varun did an impeccable job in turning the business around. The numbers speak for themselves…There are businesses with worse economics which still get investor capital. It is difficult to rationalize certain outcomes,” the person added.
He said that while the $10 million round had to be led by a new investor, some of the existing investors were also not willing to participate. This meant significant additional responsibility for remaining shareholders. “Some of us had already invested a large sum and did not want to be tied down to an investment which would require more capital calls in future,” the person said.
Some of us had already invested a large sum and did not want to be tied down to an investment.
—An investor
A spokesperson from Inflection Point Ventures said it had sold part of its stake in 2022, at a valuation 3.5 times compared to its entry. So, it has recovered the invested capital and Otipy is not a complete write-off.
“Inflection Point Ventures was prepared to participate in the ($10 million) round, as we continued to believe in the founder’s vision…it was growing steadily and inching toward profitability. The immediate reason for the closure was the unexpected withdrawal of a committed term sheet from a lead family office, which disrupted the entire fundraising round,” the spokesperson added.
Other lead investors in Otipy—WestBridge Capital and SIG Venture Capital—did not respond to queries from Mint.
Fat cheques, big burn
Otipy tried to crack the fresh produce value chain with multiple interventions. It offered consumers a wide choice, from regular and organic produce to lab-tested, low-pesticide residue fruits and vegetables.
The company did not store unsold produce to ensure fresh supply the next day, yet, managed to limit wastage to less than 3% of sourced produce, the founder said. This was achieved by harvesting vegetables based on demand forecasts. It also built a traceable system, one where a consumer’s complaint could be traced back to the farm from where it came—to ensure quality.
View Full Image
Did the market not value any of it?
“We were operationally positive but were unable to recover corporate costs (of expensive human resources),” said a former top executive at Otipy who left the company in May and requested not to be named. The top leadership, about seven-eight people, would cost ₹70 lakh to a crore each, per annum. In the next tier were about 12-15 executives who were hired for ₹30-40 lakh each. These corporate costs accounted for an annual outgo of ₹18 crore (about half of its losses last fiscal year).
The top leadership, about seven-eight people, would cost ₹70 lakh to a crore each, per annum. In the next tier were about 12-15 executives who were hired for ₹30-40 lakh each.
“The burn due to high corporate costs left little money for stuff like marketing campaigns,” the person quoted above said. The former executive added that the emergence of quick commerce ate into Otipy’s share of the consumer basket, but some of its metrics were better. Otipy’s average order fulfillment cost was around ₹50 per delivery, a lower number compared to ₹90-110 spent by quick commerce players.
“At 60,000 orders per day, we would have turned cash positive. But the $10 million deal was called off at the last moment,” the person said.
The graveyard
To be sure, Otipy is not the first company to go down in the perilous farm-to-fork game. Another direct-to-consumer (D2C) fresh produce startup, Fraazo, shut shop in 2022 after raising $48 million. Deep Rooted, which raised $25 million, according to numbers from Tracxn, folded up in March this year.
Bigger questions have now surfaced: What do these closures signify for others? Will the toll be limited to D2C startups dealing in perishables? Also, will these recent shutdowns prolong the funding winter for ag-tech ventures? What about those trading in non-perishables like grains and farm inputs, whose raison d’être was to modernize and extract value from India’s fragmented and supposedly ‘inefficient’ agriculture supply chain?
The grapevine is, many of these older startups are struggling with no clear path to profitability.
IAS to Sabziwala
Pravesh Sharma saw the informal actors up close, long before techies helming ag-techs did. A senior bureaucrat from the Indian Administrative Services posted in the agriculture ministry, Sharma opted to retire early to start Sabziwala in 2016, a startup which began its journey from Dwarka in Delhi.
Leveraging his prior work with farmer producer companies, Sharma built a model where branded and pre-packed vegetables were supplied to neighbourhood kiranas, mom-and-pop grocery stores, who in turn sold it to their regular clientele. For the first time, customers were offered neatly packed, graded and sorted vegetables at a neighbourhood store. But unable to compete with the informal channels, Sabziwala pivoted to a B2B model. Under a new entity named Kamatan, it moved away from the kiranas to cater to bigger players like restaurants and retail chains.
Sharma was quick to realize that the much-demonized minions running the supply chain were actually efficient on many counts. These small players have no overhead or storage costs, Sharma said. They are desperate to eke out a living. The push cart seller will sell at one price in the morning and keep changing rates till the last ounce is sold. Early in the day, when no organized retailer is even open, they will make a quarter of daily sales to people returning from a morning walk.
The push cart seller will sell at one price in the morning and keep changing rates till the last ounce is sold. Early in the day, when no organized retailer is even open, they will make a quarter of daily sales to people returning from a morning walk.
“I don’t see a success case in fresh produce in the near future. Of course, there are possibilities if one can access export markets or target premium buyers who are willing to pay more for low-chemical residue produce,” said Sharma, now a director at Samunnati, a startup which provides working capital loans to farmer-run companies.
Fresh attempts
Despite the ongoing mayhem precipitated by quick commerce, a flurry of startups is trying to crack the fresh produce market, with both D2C and business-to-business (B2B) models. The list includes older ones set up between 2017 and 2020, like Vegrow, Pluckk, Superplum and Fresh From Farm, which have together raised nearly $130 million. Two D2C startups which were founded last year, Freshly and Origin Fresh, have raised some seed capital.
One can still build a profitable venture in perishables, targeting a wallet share of ₹2,000-3,000 per month per consumer, argued Sumeet Seraf, founder of Equity360, a fundraising advisory. But it will need a razor-sharp focus on freshness and quality, to build consumer trust and recall. It won’t work if investors are impatient and push founders to deliver quick growth, Seraf added.
Seraf spoke of Origin Fresh, which has adopted a hybrid model, catering to both consumers and businesses like hotels and restaurants. Origin runs 15 physical stores and does app-based deliveries in Bengaluru and Chennai.
View Full Image
Origin is a profitable business, Prashanth Vasan, co-founder and chief executive officer (CEO) of the company, claims. In 2024-25, it earned a modest revenue of ₹60 crore with an Ebidta of 10%. Ebidta is earning before interest, taxes, depreciation, and amortization—a measure of business profitability after excluding certain expenses. Earlier this year, Origin Fresh raised a seed round of $1.3 million from Aeravti Ventures, Sattva family office and Botnar Foundation, a Swiss philanthropy.
“We want to be known among consumers as the specialist of the fruit and vegetable market,” said Vasan.
Vasan stressed upon a few things Origin is doing differently: frugal hires to run the show; grow at a steady (and not a breakneck) pace; limit wastage, and resist the temptation to sell items other than fresh produce—such as eggs, dairy and staples—which most end up doing, to increase the average order value (AOV).
As a partner in a venture fund put it: Many D2C players are trying this strategy of ye bhi karke dekh lo (try adding more products and see if that works) to protect their AOVs from the jaws of quick commerce.
Bear in the farm
As of now, the once abuzz farm startup ecosystem is experiencing a protracted funding winter. A sense of bearishness seems to have taken hold. The numbers are telling.
As per the India Impact Investment report, released in April, equity investments in agriculture startups witnessed a massive 54% decline, from $839 million in 2022 to $383 million in 2024. The report was published by the India Impact Investors Council (IIIC), an industry body encouraging private investment to generate social and environmental impact, not just financial returns.
At $45 million, the largest deal last year was won not by any blue-eyed darling of the startup world, but a farmer producer company named Sahyadri. The company is now India’s largest exporter of grapes, supplying to exacting western buyers. It took Sahyadri close to 15 years to reach where it is today.
View Full Image
The funding slowdown can be seen as a correction after a period of over-exuberance, Emmanuel Murray, investment director at Caspian, a VC fund which invests both equity and debt capital, observed in the report quoted above. Murray advised investors who do not have a deep understanding of the sector, to take a cautious approach. Agriculture, he said, is better suited to impact funds with a longer-term outlook aligned with the sector’s (slower) growth dynamics.
Another sector report released earlier in 2025 by ThinkAg, a collaborative platform of entrepreneurs and investors, observed that the market ‘suffered’ due to excess capital flows in 2021 and 2022, leaving many adrift when funding exited abruptly.
The authors of the report calculated total ag-tech investments in 2024 at $412 million (a tad higher than the IIIC report), but a staggering slide from the $1.3 billion invested in 2021. The slowdown, the authors observed, is a sign of a mature market where discipline has replaced speculative funding. They hoped money will “return selectively to companies that demonstrate strong financial return potential.”
Some say these reports are mere window-dressing of a forthcoming bloodbath.
“There are no visible success stories, either in trade of non-perishable commodities, or delivery of fresh produce to consumers. Money was raised when the iron was hot. And funds are now stuck, unable to make profitable exits,” said the former head of a VC fund who did not want to be named. “Truth has this habit of rearing its head, eventually. And it won’t be a pleasing sight when more dead bodies are discovered,” he prophesized.
What’s next?
It’s been more than two months since Otipy shut operations. What are the chances of its revival? Varun Khurana, the founder-CEO, insists it is not the end of the story yet. “There is still a critical mass of believers who think that Otipy’s business model is a viable one,” Khurana said, adding, he is working through the leftovers to secure funding to get Otipy up and running again.
View Full Image
If that rare ‘miracle’—as the investor quoted earlier in this piece put it—really happens, would he do anything differently? Yes, maybe a couple of things, Khurana said. He did not elaborate which ones.
Between long pauses, which punctuated a series of telephonic conversations between Khurana and this reporter, one aspect was not clear. What is a founder of a startup, now 45, who sold two of his earlier companies in million dollar exits, more anxious about—letting go of a brand that took the prime of his career to build, or salvaging his own legacy as a serial entrepreneur?