Milkbasket pioneered subscription commerce in India, but it seems that Otipy, backed by Westbridge, is leading the charge with its farm-to-fork model, delivering ordered items the following morning.
Offering a range of fruits, vegetables, dairy, and bakery products, along with subscription options, Otipy reports over a 50% growth in Gross Merchandise Value (GMV) for the fiscal year ending March 2024. During the same period, it reduced losses by 21%, as shared by its founder and CEO, Varun Khurana, in an interview with Entrackr.
“Otipy achieved a gross revenue of Rs 115 crore in FY23, comprising Rs 96 crore of operating revenue, Rs 11 crore of discounts offered, and other income of Rs 8 crore,” Khurana stated.
Fruits and vegetables constitute 70% of Otipy’s total collection, with groceries and dairy products contributing 20% and 10%, respectively. Khurana highlighted that procurement costs accounted for 70% of total expenses, which stood at approximately Rs 245 crore in FY24, including employee benefits and logistics.
Otipy claims to fulfill 8 lakh orders monthly, with a 10% month-on-month growth rate. The average order value is around Rs 270, with a fulfillment cost of Rs 40 per order, enabling the company to operate profitably even with low average order values.
Though Otipy has been operating in Delhi (NCR) and Mumbai, it plans to expand to Bengaluru and Hyderabad in the latter half of 2024. Khurana explained the gradual expansion strategy, emphasizing the need to perfect the model and unit economics before expanding further.
Backed by investors like Westbridge Capital, SIG India, and Omidyar Network, Otipy has raised $44 million across several rounds, including a $32 million Series B round.
Khurana stated, “A strong focus on reducing losses throughout the last fiscal year helped us cut losses by 21% to Rs 71 crore in FY23.” Otipy has achieved an average monthly revenue run rate (ARR) of Rs 20 crore and aims to reach Rs 500 crore in gross revenue in FY25 while achieving positive EBITDA at a monthly level.
Otipy has quietly built a strong user base, delivering on its promise of fresh produce despite challenges. However, its association with smaller brands could risk diluting its core brand promise. Expansion, especially in East and South India, may present challenges due to stiff competition and differing market dynamics.
