PepperTap Shuts Down Grocery Delivery, Pivots to Logistics

Hyperlocal grocery delivery startup PepperTap announced on Saturday that it will be shutting down its operations, the latest casualty in a sector that saw exits of pilots programs from Ola and Flipkart this year. The company will be shifting its focus to e-commerce logistics, where it can lend its expertise of same day deliveries.

"We are now changing our business model and will not be able to deliver groceries to you. In case you have any queries, feel free to call us at 186001216001 or email us at care@peppertap.com," reads the farewell message posted on PepperTap's app.

Navneet Singh, Co-Founder of PepperTap apologised to customers in a blog post, elaborating on the reasons for the shutdown, citing an adverse funding environment, and lack of unit economics and profitability.

"Losing cash on every order (no matter how small or how controlled or how goal-oriented the burn) meant one day we will run out of cash - perhaps we could slow down the process but mathematically speaking, this was a certainty. We couldn't shake off the feeling that we were walking (not racing like some other companies) towards the edge of a cliff hoping that things will get better before we reach the abyss," Singh wrote.

The company will be using its expertise in last-mile delivery to e-commerce as an alternative way to use the funds already raised from investors. Sequoia Capital, SAIF Partners, Snapdeal, BEENEXT, ru-Net Holdings, JAFCO Asia, and InnoVen Capital have together invested over $50 million (roughly Rs. 333 crores) in Nuvo Ex, which launched as a reverse logistics service provider, and launched PepperTap in November 2014.

PepperTap's exit now leaves the market wide open to startups like BigBasket, Grofers, and Terraa. Amazon Now hasn't expanded its operations outside Bengaluru yet.