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PepperTap closes online grocery delivery biz; to pivot to logistics

peppertap-closed

Online grocery delivery service PepperTap, which raised $51.2 million in funding since inception, has shut down its grocery delivery operations across the country, reports YourStory. An ET report states that of PepperTap’s 200 employees, the company will retain 50 for its logistics business, while let go of the remaining 150, offering compensation of up to 3 months’ salary.

The company cited three reasons for the shutdown:
– Its integration with partner stores was ‘not that great’ and it brought too many stores online too quickly
– Lots of resources spent on devising sales and discounts, which PepperTap thought would be in the cost of doing business
– Building buffer capacity in every city where it operated + discounts leading to increased cash burn for every order

PepperTap has apparently pitched alternative ways of using the money it has raised so far, but further details on the matter are scant. YourStory reports that it plans to become a “full stack e-commerce logistics company.”

Operations scaled down: PepperTap had tried to curb its spending and realign its focus on “depth rather than breadth” by closing operations in 6 cities in February this year. It also laid off 400 delivery personnel at this time. In September 2015, according to this Mint report, PepperTap also shut down operations in Agra and Meerut after a month long pilot. It claimed to deliver 40,000 orders in a single day in 2015, and said that it was delivering 7,000-8,000 orders daily.

Previous funding, acquisition and GMV
– In December 2015, the company raised $4 million and acquired Jiffstore, a Bangalore based hyperlocal grocery delivery service for an undisclosed amount.
– In September 2015, it raised $36 million in Series B funding to grow sales, hire and expand to 75 cities by 2015 fiscal year end. It claimed that its GMV run rate of $1 million at the start of fiscal 2015-16, was set to hit over $250 million at the end of the fiscal.
– In April 2015, it raised $10 million and in February 2015, it raised seed funding worth $1.2 million.

PepperTap was founded in November 2014 by Milind Sharma and Navneet Singh. It partnered with local grocery stores to take their inventory online. Nuvo Ex, the Gurgaon based parent company of PepperTap, currently counts Snapdeal, Jabong, Paytm, Lenskart, Indiatimes Shopping, Shopclues, Healthkart, Fashion & You and Ask Me as customers.

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Other shutdowns in online grocery delivery:
– Last month, Ola shut down its food and grocery delivery businesses Ola Cafe (launched in March 2015) and Ola Store.
– In February, Flipkart shut down its grocery delivery service Nearby five months after its launch.
– In January, Grofers shut down its services in 9 cities citing low acceptance. In November 2015, Grofers raised $120 million in funding.

Our online grocery coverage.

Written By

I'm a MediaNama alumna from 2015-16 (remember TinyOwl?) now back to cover e-services like food and grocery delivery, app based transport and policies, platforms and media in India.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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