Subscription-based grocery startup Otipy shuts down amid cash crunch; impacts 300 employees

Subscription-based grocery provider Otipy brought down the curtains on May 17, impacting around 300 employees in addition to gig workers and delivery partners.

Startup founder speaks

Cofounder and CEO Varun Khurana is understood to have told his employees that the startup cannot proceed further with its business and asked them to look for better options at a town hall meeting last week.

The farm-to-fork vegetable provider has reportedly withheld staff salaries as well as delayed payments to vendors.

WestBridge Capital-backed Otipy is the latest among startups that have shut operations.

The decision comes amid a downturn for grocery subscription services, which have struggled since the rise of quick commerce platforms. The rapid 10-minute delivery model has also hugely affected sales at traditional kirana stores.

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About Otipy

Founded in June 2020, the Delhi-NCR-based startup was set up as a subsidiary of Khurana’s agritech firm Crofarm India. 

As per Tracxn, the business-to-business-to-consumer (B2B2C) startup generated a revenue of around Rs 164 crore in FY24, up from Rs 115 crore a year ago.

The brand connected end consumers to farmers via a community of resellers who handled the last-mile delivery of fruits and vegetables in Mumbai and Delhi-NCR.

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The issues with grocery subscription model

Currently, the grocery subscription model is facing challenges because of the rise in quick commerce. Incidentally, BBdaily, the subscription service by Tata Digital-backed firm BigBasket, which used to run as a separate app, was merged into the main BigBasket app in September last year.

However, direct-to-consumer (D2C) fresh foods leader Country Delight, offering direct-to-home delivery of fresh food essentials like milk, ghee, paneer, fruits, and vegetables, continues to operate under a daily subscription model.

The quick commerce industry has reportedly grown to $ 7.1 billion in FY25 from $300 million in FY22. [Source: Indus Valley 2025 report by venture capital firm Blume Ventures]

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