Indian Agritech Startup Otipy Shuts Down After Funding Failure

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Key Take Aways:

• Otipy shut down in a middle of funding winter
• farm-to-consumer platform, operating under its parent company Crofarm Agriproducts
• shutdown has left approximately 300 employees jobless and raised concerns
• Otipy had previously secured substantial funding, including a US$32 million

Indian Agritech Startup Otipy Shuts Down Amidst Funding Winter,

A startup specializing in community group buying for fresh farm produce, has ceased operations, citing a critical failure to secure a crucial US$10 million funding round.

The abrupt shutdown has left approximately 300 employees jobless and raised concerns among customers and delivery partners regarding unpaid dues and unrefunded wallet balances.

The Rise and Fall of Otipy

The farm-to-consumer platform, operating under its parent company Crofarm Agriproducts

, had been a notable player in streamlining the agricultural supply chain, connecting farmers directly with urban consumers through a network of community resellers.

Founded by Varun Khurana, Otipy aimed to deliver fresh produce to doorsteps within 12 hours of harvesting, leveraging AI-based demand prediction to minimize waste.

Funding Woes and Last-Minute Withdrawal

Sources close to the company indicate that the primary investor, the Hero family office, withdrew its support at the eleventh hour, plunging Otipy into an immediate cash crunch.

This withdrawal came despite the startup’s significant growth, with a reported 50% increase in Gross Merchandise Value (GMV) and a 21% reduction in losses in FY24, achieving a top-line revenue of approximately INR 160 crore (around $19.2 million USD).

Otipy had previously secured substantial funding, including a US$32 million Series B round led by WestBridge Capital in 2022, with participation from SIG and Omidyar Network India.

This followed a US$10.2 million round just six months prior, bringing its total raised capital to around US$44 million. The company’s last recorded funding was a US$2 million venture debt from Nuvama Asset Management in March 2025, which was intended to precede the ill-fated US$10 million equity round.

Impact of the "Funding Winter"

The shutdown highlights the intensifying “funding winter” in the agritech sector, which has seen a broader contraction in investment throughout 2024-2025. While Otipy had optimized its logistics costs and reduced waste, the inherent challenges of managing perishable inventory and achieving profitability in the farm-to-consumer model proved insurmountable without continued investment.

Fallout for Employees and Customers

Employees report being informed of the shutdown in a town hall by CEO Varun Khurana on May 18, urging them to seek new opportunities.

Concerns are mounting over unpaid salaries for the past six weeks, with Khurana reportedly working to liquidate company assets to settle outstanding obligations. Customers and delivery partners have also taken to social media, expressing frustration over unrefunded wallet balances and pending payments.

Otipy’s closure serves as a stark reminder of the volatile nature of the startup ecosystem, particularly for capital-intensive models in nascent markets.

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