Otipy, a community group buying platform for fresh fruits and vegetables, has raised $10.2 million in its Series A round led by SIG. Other investors who participated in the funding include Omidyar Network India, Innoven Capital and existing investors Inflection Point Ventures, Pravega and FactorE.
This is the second round of funding for Otipy, which transformed from a farm-to-retail model (Crofarm) to become a B2B2C platform in early 2020 with a flavour of social commerce. Inflection Point Ventures and Smile Group had put in $2 million in the Gurugram-based firm last year.
While Otipy did not disclose its valuation in the Series A round, Entrackr’s sources pegged it in the range of $25-30 million. According to the company, the fresh proceeds will support its future growth trajectory and add additional categories to its supply chain.
Otipy founder and CEO Varun Khurana said Fresh produce is a 35%-40% gross margin category, however, it is the wastage that kills those margins. “We are amongst the first companies that have been able to control it via our innovative model,” said Varun Khurana.
Otipy’s farm-to-fork delivery model optimises for freshness by procuring directly from farmers. Using proprietary demand prediction engines, the company ensures little or no stocking of fresh produce. The company claims to deliver fresh produce to consumers in less than 12 hours.
The company further claims to source more than 2,500 tonnes of fresh produce every month from over 10,000 farmers across the country. It essentially follows a social commerce model where the company delivers the products to local shops and resellers, especially women, who handle the last-mile delivery.
According to Otipy, these resellers earn 8-10% in commission on each fulfilment. Currently operational in Delhi (NCR), Otipy claims to service 2 lakh households in the region. According to the company, the fresh funds will also help it enter more cities in the coming future.
Otipy directly competes with Safal Stores and hyperlocal sabziwala along with egrocers such as BigBasket and Grofers. It’s worth noting that Meesho has also been operating in this space for about a year with Farmiso. However, it seems the new offering is yet to take off.
While there is no direct competition for Otipy, new-age social commerce companies such as DealShare and CityMall may enter this space since the margin in fruits and vegetables is high and sustainable in the long haul.
(The story is based on Entracker report)
