HARYANA, 9 March 2022: Agri-tech startup Otipy has raised INR 235 crore (USD 32m) in its series B round led by Westbridge Capital. Existing investors SIG and Omidyar Network India were also involved, according to the company.
This funding comes six months after Otipy raised INR 76 crore in a Series A round.
Crofarm Agriproducts Pvt Ltd operates Otipy, which was launched in 2020 by Varun Khurana. Within the context of persistent lockdowns across India, consumers enrolled in buying goods online to stock up on daily necessities.
Khurana said the company plans to use the funds to expand to newer cities such as Mumbai, Bengaluru, Hyderabad and Chennai apart from deepening its presence in existing markets. The company also plans to add newer categories such as the recently added fresh bread offering.
Otipy sources fruits and vegetables directly from farmers. It then uses local community leaders that work as its delivery partners. These could be tailors, grocery shops owners, or small businesses looking for an additional source of income. Thousands of such partners on its network receive packages in the morning and dispatch them to respective households in the area.
In all, Otipy caters to over 5 lakh households largely in Delhi-NCR moving over 100 tonnes of fresh produce from farms to consumers daily. It also supplies to cities such as Sonepat, Meerut and Bhiwadi. It plans to reach 25-30 lakh households in Delhi-NCR by the end of the next fiscal, Khurana added.
India’s e-grocery market is expected to grow over 59 per cent CAGR to USD 18bn by 2024, according to an estimate by brokerage Motilal Oswal Financial Services Limited. India had 154 million online transacting households in 2020, with 130 million already using some form of e-grocery platforms or at least willing to try, the report said.
Otipy uses its technology to procure produce from farmers based on the demand and delivers produce to the customers within a 12-hour cycle. By the end of the current fiscal year, company officials predict revenue will jump nearly five times to INR 100 crore.
“We are optimising the time taken from harvest to delivery. When it comes to perishable produce, the quicker you can move it from farm to consumers, the fresher it will be. Wastage will also reduce," said Khurana.
India’s grocery market has historically been bogged down by wafer-thin gross margins, higher logistics costs, and complex inventory management, making it difficult to achieve sustainable profits and compete with the traditional retail and distribution channel, the report said. But the path to scale and profitability, with multiple levers and a stronger balance sheet, is now becoming clearer for e-grocers, it added.
The series B round of funding will strengthen the supply chain, and enable the company to invest in cutting-edge technology, said Khurana.
Otipy is disrupting the daily essentials market via the community group buying model, said Sandeep Singhal, managing director at Westbridge Capital. “We see very strong fundamentals in their business model and are excited to be partners in their growth journey," Singhal said.
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