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Agritech startup Otipy raises $32 million

Otipy sources fruits and vegetables directly from farmers. It then uses local community leaders that work as its delivery partners. Photo: Indranil Bhoumik/MintPremium
Otipy sources fruits and vegetables directly from farmers. It then uses local community leaders that work as its delivery partners. Photo: Indranil Bhoumik/Mint

  • The company plans to use the funds to expand to newer cities such as Mumbai, Bengaluru, Hyderabad and Chennai apart from deepening presence in existing markets. The company also plans to add newer categories such as the recently added fresh breads offering

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Agri-tech startup Otipy has raised 235 crore or $32 million in its series B round led by Westbridge Capital. Existing investors SIG and Omidyar Network India also participated in the round, the company said on Monday.

The funding comes six months after Otipy’s series A funding of 76 crore.

Operated by Crofarm Agriproducts Pvt Ltd., Otipy was launched in 2020 by Varun Khurana. The launch timing coincided with persistent lockdowns across India that drove consumers to stock up on goods of daily use and log online to buy everything from pulses to fruits.

Khurana said the company plans to use the funds to expand to newer cities such as Mumbai, Bengaluru, Hyderabad and Chennai apart from deepening presence in existing markets. The company also plans to add newer categories such as the recently added fresh breads 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 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 told Mint.

India’s e-grocery market is expected to grow over 59% CAGR to $18 billion 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.

The pandemic also pushed consumers towards ordering such goods online expanding the addressable market for e-grocers. Meanwhile, the market is also seeing a fundamental shift with the entry of quick commerce players that are pushing the envelope on speedy delivery of essential goods.

The first set of lockdowns helped e-grocers such as Big Basket and Blinkit report a three to four-fold surge in daily orders, analysts at Motilal Oswal Financial Services 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. It expects its turnover to jump nearly five times to 100 crore by the end of this fiscal year, the company said.

“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 cost, 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 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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