Gurgaon-based hyperlocal delivery startup PepperTap is shutting operations in six cities, including Mumbai, Kolkata and Chennai. PepperTap will continue operations in 12 cities and suburbs out of the 18 it was present in.

Backed by VC firm Sequoia Capital, the startup will also be laying off about 400 delivery men out of 2,500 employees it has, which is a mix of contract and permanent staff. This lay-off is a sign of heightened pressure on delivery startups to conserve capital amid a slowdown in funding. Notably, last month PepperTap's larger rival Grofers decided to close operations in nine cities, including Ludhiana, Bhopal, Kochi, Coimbatore and Visakhapatnam.

PepperTap will continue to operate in Delhi, Gurgaon, Noida, Hyderabad, Pune, Ghaziabad, Faridabad and Bangalore which, Singh said, contribute as much as 70% of revenues. PepperTap had plans to expand into 75 cities when it announced its $36-million raise last year led by Snapdeal.

In September, PepperTap had rolled back operations in smaller towns such as Agra and Meerut after a month-long pilot failed to take off. According to the company, it will now shut down business in larger cities such as Ahmedabad, Chandigarh, Mumbai, Kolkata, Chennai and Jaipur.

In December, Peppertap had acquired Bengalore-based grocery delivery startup Jiffstore while closing its USD 40 million round of funding.

Founded in 2013 by Navneet Singh and Milind Sharma, the company has raised over $51 million in total since its inception.

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