Delhi-NCR-based subscription grocery startup Otipy has officially ceased operations as of May 17, 2025, leaving around 300 employees, gig workers, and delivery partners without jobs. The abrupt closure was confirmed in a town hall meeting where cofounder and CEO Varun Khurana informed staff that the company could not continue and encouraged them to seek new opportunities.
Salaries Withheld, Vendors Unpaid
Otipy’s shutdown has also resulted in withheld salaries for staff and delayed payments to vendors. Employees have reportedly not received their salaries for over a month, and vendors began facing payment delays as early as October 2024. The company has assured customers that outstanding wallet balances will be refunded within 60 to 90 days.
Otipy’s Business Model and Growth
Founded in June 2020 as a subsidiary of Crofarm Agriproducts, Otipy operated on a B2B2C model. It sourced fresh produce directly from farmers and delivered it to end consumers through a network of community resellers. The startup primarily served the Delhi-NCR and Mumbai markets.
Despite challenging market conditions, Otipy’s revenue grew from ₹115 crore in FY23 to ₹164 crore in FY24. The company had raised a total of $44 million in funding, with its last round being a $2 million debt raise. Major backers included WestBridge Capital, which also led a significant Series B round in 2022.
Quick Commerce: The Game Changer
Otipy’s closure highlights the mounting pressure on the grocery subscription model. The rise of quick commerce platforms, which promise delivery in under 10 minutes, has shifted consumer preferences away from scheduled deliveries. This rapid delivery model has not only hurt subscription-based startups but also impacted traditional kirana stores.
The quick commerce sector has seen explosive growth, expanding rapidly over the past few years.
Industry Trends: Consolidation and Survival
Otipy’s shutdown is part of a larger trend in the online grocery segment. Last year, Tata Digital-backed BigBasket merged its BBdaily subscription service into the main BigBasket app, citing similar pressures. However, some players like Country Delight continue to operate successfully under a daily subscription model by focusing on vertically integrated, direct-to-consumer delivery of essentials such as milk and ghee.
What Lies Ahead for Employees and the Industry?
The sudden shutdown has left Otipy’s workforce and partners in a difficult position. The company’s management has promised to liquidate assets to clear dues, but employees and vendors remain anxious about their pending payments.
Otipy’s story serves as a cautionary tale for India’s fast-evolving grocery delivery sector. As quick commerce platforms continue to dominate, startups will need to innovate and adapt to survive in this highly competitive market.