The startup will instead pivot and focus on building a logistics company to compete with startups including Delhivery, Flipkart’s ekart division and go Javas head on, multiple sources told ET.
The company already runs a reverse logistics arm through its parent company Nuvoex Logistics Pvt. Ltd.
“They are shutting down grocery delivery to focus on the logistics business,” said one of the sources who is directly aware of the developments. “The company has substantial cash in the bank to scale that (B2B logistics business).”
Peppertap plans to aggressively build forward logistics technology to complete the whole B2B stack, this person said.
The move to shut down grocery delivery operations could be a prelude to PepperTap shuttering the consumer business bowing to pressure from rivals including Grofers and Bigbasket, which have raised substantial funding.
In February, PepperTap had shut operations in six cities – Ahmedabad, Chandigarh, Mumbai, Kolkata, Chennai and Jaipur.
Navneet Singh, chief executive officer of PepperTap did not reply to email queries and calls on the development.
Last year the company rolled back operations in Agra and Meerut after a month-long pilot failed to take off. PepperTap, run by Nuvo Logistics Pvt Ltd, started as a reverse logistics company, its largest customers are ecommerce companies and the division competes with other logistics firms like Delhivery, Ecom Express, Parcelled and others.
The Sequoia Capital backed company has raised more than $50 million till date in funding. It is also backed by online marketplace Snapdeal as well as venture firms SAIF Partners, Ru Net and Innoven Capital.
In March, Bengaluru-based grocery portal BigBasket raised $150 million (about Rs 1,000 crore) in funding led by Dubai’s Abraaj Group to strengthening its express delivery service and expand its reach. Grofers too raised $120 million led by Softbank earlier this year. Grofers too shut down operations in nine cities, including Ludhiana, Bhopal, Kochi, Coimbatore and Visakhapatnam earlier this year.
PepperTap was founded by Singh in November 2013 alongwith former colleague Milind Sharma.
Source: The Economic Times