That’s an extreme quantity of hassle for too little enterprise, one might suppose. Khurana thought in some other case.
The problem appeared to him as a window of other: to reduce wastage throughout the up to date produce present chain and create value for every farmers and prospects. Along with, a farm-to-table up to date produce enterprise might very nicely be a extreme margin enterprise. On account of what farmers promote for ₹10 per kg is normally purchased to prospects at two to some events the farm-gate worth. So why not give it a shot? Bypass the varied intermediaries throughout the present chain, work intently with farmers on top quality enchancment, and ship the most effective produce to prospects.
A few years later, in early 2020, Khurana primarily based Otipy. Rapidly after, a pandemic-induced reset in shopper behaviour, fuelled a rush of enterprise capital. In decrease than two years, the startup raised an enviable $44.2 million from a flock of consumers like WestBridge Capital, Inflection Stage Ventures and SIG Enterprise Capital, amongst others.
In 2021 and 2022, agri-tech (ag-tech) startups obtained virtually $2.2 billion in enterprise funding—an element now reflectively seen as “over-exuberance of speculative capital”.
The closure
The title Otipy was chosen to convey a method of genuineness and perception to prospects—a play on one-time-passwords or OTPs which could be required to authenticate financial transactions. At its peak, sometime in mid-2023, Otipy delivered 30,000 orders to shopper doorsteps every morning in Mumbai and the nationwide capital space. Between 2022-23 and 2024-25, its annual earnings 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 Would possibly 2025, pretty abruptly, Otipy shut operations. It ran out of cash after a $10 million fundraise anticipated in February, from a model new investor, a family office, did not come by way of. Present consumers have been reluctant to infuse funds, cautious of the rising footprint and recognition of quick commerce platforms, the likes of Zepto, Blinkit and Instamart, although these did not concentrate on perishables.
“Someplace spherical June last yr, our cash transfer challenges started,” Khurana wrote in an email correspondence despatched to consumers on 23 Would possibly. “Whereas I keep deeply devoted to the company and wish to maintain it going, persevering with with out up to date capital is solely not doable…,” he added.
“I contemplate the altering funding setting and the impression of quick commerce moreover made it troublesome to elevate capital. Whereas we launched down our burn to decrease than ₹2 crore a month, it was nonetheless higher than what the market expects presently,” Khurana extra wrote.
It was not that consumers stopped ordering on its app, the founder instructed Mint over a phone identify last week. It was the priority of quick commerce which triggered a turnaround in investor curiosity.
Quick commerce supplied prospects the consolation of super-fast, 10-minute deliveries, compared with the seemingly arduous exercise for an Otipy shopper to place an order sooner than midnight and acquire provide the following morning.
Khurana added that he is trying to elevate funds to restart operations. Within the meantime, your total senior administration has left the company. Shopper complaints regarding unspent pockets stability have surfaced on social media. The founder said these could be refunded inside 90 days from the date of shut down (17 Would possibly).
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The write-off
Besides a miracle happens, it’s a write-off for us,” said an advisor at a enterprise capital fund which was among the many many early consumers in Otipy. The actual particular person did not should be named.“Varun did an impeccable job in turning the enterprise spherical. The numbers talk for themselves…There are corporations with worse economics which nonetheless get investor capital. It is troublesome to rationalize certain outcomes,” the actual particular person added.
He said that whereas the $10 million spherical wanted to be led by a model new investor, a variety of the current consumers have been moreover not eager to participate. This meant very important additional obligation for remaining shareholders. “A number of of us had already invested a giant sum and did not should be tied proper all the way down to an funding which could require additional capital calls in future,” the actual particular person said.
A number of of us had already invested a giant sum and did not should be tied proper all the way down to an funding.
—An investor
A spokesperson from Inflection Stage Ventures said it had purchased part of its stake in 2022, at a valuation 3.5 events compared with its entry. So, it has recovered the invested capital and Otipy won’t be a complete write-off.
“Inflection Stage Ventures was prepared to participate throughout the ($10 million) spherical, as we continued to contemplate throughout the founder’s imaginative and prescient…it was rising steadily and inching in the direction of profitability. The fast motive for the closure was the stunning withdrawal of a devoted time interval sheet from a lead family office, which disrupted your total fundraising spherical,” the spokesperson added.
Totally different lead consumers in Otipy—WestBridge Capital and SIG Enterprise Capital—did not reply to queries from Mint.
Fat cheques, giant burn
Otipy tried to crack the up to date produce value chain with a variety of interventions. It supplied prospects a big different, from widespread and pure produce to lab-tested, low-pesticide residue greens and fruit.
The company did not retailer unsold produce to verify up to date present the following day, however, managed to limit wastage to decrease than 3% of sourced produce, the founder said. This was achieved by harvesting greens based totally on demand forecasts. It moreover constructed a traceable system, one the place a consumer’s criticism might very nicely be traced once more to the farm from the place it received right here—to verify top quality.
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Did the market not value any of it?
“Now we have been operationally optimistic nonetheless have been unable to get higher firm costs (of pricey human belongings),” said a former prime govt at Otipy who left the company in Would possibly and requested to not be named. The very best administration, about seven-eight people, would worth ₹70 lakh to a crore each, yearly. Throughout the subsequent tier have been about 12-15 executives who’ve been employed for ₹30-40 lakh each. These firm costs accounted for an annual outgo of ₹18 crore (about half of its losses last fiscal yr).
The very best administration, about seven-eight people, would worth ₹70 lakh to a crore each, yearly. Throughout the subsequent tier have been about 12-15 executives who’ve been employed for ₹30-40 lakh each.
“The burn attributable to extreme firm costs left little money for stuff like promoting campaigns,” the actual particular person quoted above said. The earlier govt added that the emergence of quick commerce ate into Otipy’s share of the client basket, nonetheless a number of of its metrics have been greater. Otipy’s widespread order achievement worth was spherical ₹50 per provide, a lower amount compared with ₹90-110 spent by quick commerce avid gamers.
“At 60,000 orders per day, we might have turned cash optimistic. Nevertheless the $10 million deal was known as off on the ultimate second,” the actual particular person said.
The graveyard
To make sure, Otipy won’t be the first agency to go down throughout the perilous farm-to-fork recreation. One different direct-to-consumer (D2C) up to date produce startup, Fraazo, shut retailer in 2022 after elevating $48 million. Deep Rooted, which raised $25 million, in response to numbers from Tracxn, folded up in March this yr.
Better questions have now surfaced: What do these closures signify for others? Will the toll be restricted to D2C startups dealing in perishables? Moreover, will these newest shutdowns delay the funding winter for ag-tech ventures? What about these shopping for and promoting 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 present chain?
The grapevine is, a lot of these older startups are struggling with no clear path to profitability.
IAS to Sabziwala
Pravesh Sharma seen the informal actors up shut, prolonged sooner than techies helming ag-techs did. A senior bureaucrat from the Indian Administrative Corporations posted throughout 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 firms, Sharma constructed a model the place branded and pre-packed greens have been outfitted to neighbourhood kiranas, mom-and-pop grocery retailers, who in flip purchased it to their widespread clientele. For the first time, prospects have been supplied neatly packed, graded and sorted greens at a neighbourhood retailer. Nevertheless unable to compete with the informal channels, Sabziwala pivoted to a B2B model. Under a model new entity named Kamatan, it moved away from the kiranas to cater to bigger avid gamers like consuming locations and retail chains.
Sharma was quick to understand that the much-demonized minions working the provision chain have been actually atmosphere pleasant on many counts. These small avid gamers have no overhead or storage costs, Sharma said. They’re decided to eke out a residing. The push cart vendor will promote at one worth throughout the morning and maintain altering expenses till the ultimate ounce is purchased. Early throughout the day, when no organized retailer is even open, they could make 1 / 4 of every day product sales to people coming back from a morning stroll.
The push cart vendor will promote at one worth throughout the morning and maintain altering expenses till the ultimate ounce is purchased. Early throughout the day, when no organized retailer is even open, they could make 1 / 4 of every day product sales to people coming back from a morning stroll.
“I don’t see a success case in up to date produce throughout the near future. In reality, there are prospects if one can entry export markets or aim premium patrons who’re eager to pay additional for low-chemical residue produce,” said Sharma, now a director at Samunnati, a startup which supplies working capital loans to farmer-run firms.
Latest makes an try
Whatever the continued mayhem precipitated by quick commerce, a flurry of startups is trying to crack the up to date produce market, with every D2C and business-to-business (B2B) fashions. The guidelines consists of older ones prepare between 2017 and 2020, like Vegrow, Pluckk, Superplum and Latest From Farm, which have collectively raised virtually $130 million. Two D2C startups which have been primarily based last yr, Freshly and Origin Latest, have raised some seed capital.
One can nonetheless assemble a worthwhile enterprise in perishables, concentrating on a pockets share of ₹2,000-3,000 month-to-month per shopper, argued Sumeet Seraf, founding father of Equity360, a fundraising advisory. Nevertheless it’s going to desire a razor-sharp consider freshness and top quality, to assemble shopper perception and recall. It acquired’t work if consumers are impatient and push founders to ship quick progress, Seraf added.
Seraf spoke of Origin Latest, which has adopted a hybrid model, catering to every prospects and firms like resorts and consuming locations. Origin runs 15 bodily retailers and does app-based deliveries in Bengaluru and Chennai.
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Origin is a worthwhile enterprise, Prashanth Vasan, co-founder and chief govt officer (CEO) of the company, claims. In 2024-25, it earned a modest earnings of ₹60 crore with an Ebidta of 10%. Ebidta is incomes sooner than curiosity, taxes, depreciation, and amortization—a measure of enterprise profitability after excluding certain payments. Earlier this yr, Origin Latest raised a seed spherical of $1.3 million from Aeravti Ventures, Sattva family office and Botnar Foundation, a Swiss philanthropy.
“We should be acknowledged amongst prospects as a result of the specialist of the fruit and vegetable market,” said Vasan.
Vasan confused upon a variety of points Origin is doing in any other case: frugal hires to run the current; develop at a delicate (and by no means a breakneck) tempo; limit wastage, and resist the temptation to advertise objects except for up to date produce—akin to eggs, dairy and staples—which most end up doing, to increase the widespread order value (AOV).
As a confederate in a enterprise fund put it: Many D2C avid gamers do that strategy of ye bhi karke dekh lo (try together with additional merchandise and see if that works) to protect their AOVs from the jaws of quick commerce.
Bear throughout the farm
As of now, the as quickly as abuzz farm startup ecosystem is experiencing a protracted funding winter. A method of bearishness seems to have taken keep. The numbers are telling.
As per the India Impression Funding report, launched in April, equity investments in agriculture startups witnessed a big 54% decline, from $839 million in 2022 to $383 million in 2024. The report was printed by the India Impression Consumers Council (IIIC), an enterprise physique encouraging private funding to generate social and environmental impression, not merely financial returns.
At $45 million, crucial deal last yr was acquired not by any blue-eyed darling of the startup world, nonetheless a farmer producer agency named Sahyadri. The company is now India’s largest exporter of grapes, supplying to exacting western patrons. It took Sahyadri shut to fifteen years to achieve the place it is instantly.
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The funding slowdown shall be seen as a correction after a interval of over-exuberance, Emmanuel Murray, funding director at Caspian, a VC fund which invests every equity and debt capital, seen throughout the report quoted above. Murray urged consumers who should not have a deep understanding of the sector, to take a cautious methodology. Agriculture, he said, is greatest suited to impression funds with a longer-term outlook aligned with the sector’s (slower) progress dynamics.
One different sector report launched earlier in 2025 by ThinkAg, a collaborative platform of entrepreneurs and consumers, seen that the market ‘suffered’ attributable to additional capital flows in 2021 and 2022, leaving many adrift when funding exited abruptly.
The authors of the report calculated complete ag-tech investments in 2024 at $412 million (a tad bigger than the IIIC report), nonetheless a staggering slide from the $1.3 billion invested in 2021. The slowdown, the authors seen, is a sign of a mature market the place self-discipline has modified speculative funding. They hoped money will “return selectively to firms that reveal sturdy financial return potential.”
Some say these evaluations are mere window-dressing of a forthcoming bloodbath.
“There usually are not any seen success tales, each in commerce of non-perishable commodities, or provide of up to date produce to prospects. Money was raised when the iron was scorching. And funds in the mean time are caught, unable to make worthwhile exits,” said the earlier head of a VC fund who did not should be named. “Actuality has this conduct of rearing its head, in the end. And it acquired’t be a satisfying sight when additional lifeless our our bodies are discovered,” he prophesized.
What’s subsequent?
It’s been higher than two months since Otipy shut operations. What are the probabilities of its revival? Varun Khurana, the founder-CEO, insists it isn’t the tip of the story however. “There could also be nonetheless a necessary mass of believers who suppose that Otipy’s enterprise model is a viable one,” Khurana said, together with, he is working by way of the leftovers to secure funding to get Otipy up and working as soon as extra.
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If that unusual ‘miracle’—as a result of the investor quoted earlier on this piece put it—truly happens, would he do one thing in any other case? Certain, presumably a number of points, Khurana said. He did not elaborate which ones.
Between prolonged pauses, which punctuated a sequence of telephonic conversations between Khurana and this reporter, one aspect was not clear. What’s a founding father of a startup, now 45, who purchased two of his earlier firms in million buck exits, additional anxious about—letting go of a mannequin that took the prime of his occupation to assemble, or salvaging his private legacy as a serial entrepreneur?