Subscription-based grocery provider Otipy shuts down amid q-commerce rise: Report

Otipy, a Delhi-NCR-based grocery subscription startup, shut down operations last week, leaving around 300 employees and numerous delivery gig workers without jobs. Founder and CEO Varun Khurana informed staff of the decision during a townhall meeting, ET reported.

The closure follows mounting pressure on the grocery subscription model, which has lost steam amid the rapid rise of quick commerce platforms promising deliveries in under 10 minutes. These services have not only diverted demand from scheduled grocery models but have also affected footfall at traditional neighborhood kirana stores.

Otipy had positioned itself as a B2B2C platform that sourced fresh produce directly from farmers and delivered it to end-consumers via a network of community resellers. The startup operated primarily in Delhi-NCR and Mumbai and was launched in June 2020 as a subsidiary of Crofarm Agriproducts, also founded by Khurana.

So far, Otipy has raised around $44 million in a mix of equity and debt over its lifetime. Its most recent funding was a $2 million debt round from Nuvama Asset Management. In 2022, Otipy raised $32 million in a Series B round led by WestBridge Capital, with participation from other existing investors.

According to data intelligence platform Tracxn, the startup generated Rs 164 crore in revenue in FY24, a rise from Rs 115 crore in the previous fiscal year.

Despite the growth in topline, reports indicate the startup has delayed payments to both employees and vendors. It's worth noting that Otipy has still not confirmed on the closure of operations. 

Otipy’s shutdown mirrors broader consolidation trends in the online grocery segment. Last September, BBdaily, the milk and grocery subscription service from Tata Digital-backed BigBasket, was folded into the main BigBasket app, reflecting similar pressures in the segment. Meanwhile, other players such as Country Delight have managed to sustain operations under a subscription model focused on essentials like milk and ghee, albeit with a more vertically integrated, direct-to-consumer approach.

In contrast, the quick commerce sector has witnessed explosive growth, swelling from $300 million in FY22 to $7.1 billion in FY25, according to Blume Ventures’ Indus Valley 2025 report.