According to industry rumours, Hyperlocal delivery start-up PepperTap, , which started operations in 2014 and even found a backing by Sequoia Capital India as well as e-commerce giant Snapdeal in September last year, has decided to wrap up its hyperlocal delivery operations due to the current funding fiasco taking place in India.

However, the startup will continue running its reverse logistics business just the way it is doing right now and may also try its hands on other logistics services for e-commerce companies.

The decision to shut its grocery delivery operationss will result in about 150 job losses in the startup. Few reports also claims of leaving about 200 office staff who were still with the company, in limbo.

In its official blog post, Peppertap says -
[cp_quote style="quote_normal_dark"]There was just one problem. The integration of our app with our partner stores was not great. In the race to pepper the whole country with PepperTap, we had brought too many stores online far too quickly. Our customers were, at times, unable to see the entire selection of items from a store and sometimes even essential items were missing from the catalogue visible to them.[/cp_quote]

In September last year, Snapdeal had bought a minority stake in the startup around the same time when it had managed to raise a whopping $36 million from a number of high profile investors like BeeNext Ventures, Sequoia India, SAIF Partners and JAFCO etc.

Then the year ending again saw PepperTap raising $4 million from Innoven Capital in venture debt. It was followed by the acquisition of a Bangalore based delivery startup Jiffstore through the means of cash and stock for a undisclosed amount.

Nuvo Logistics, the firm which controls PepperTap and is also working with clients such as Shopclues, Snapdeal and Paytm, already has an operational reverse logistics business. According to co-founder Navneet Singh's statement given in an interview in December last year, the company had already planned to transform the hyperlocal business into a brand new entity by March 2016.

According to industry experts, Indian Hyperlocal delivery start-ups have been going downhill because of the investment slowdown that has hit the industry. These startups function on very thin profit margins and wound up losing money on almost every delivery that they make. This is the reason that instead of going up the ladder and expanding their business, these startups have gone on a spree to shrink their operations.

According to our previous report dated 9 February, the Gurgaon based PepperTap was considering shutting down its operations in six cities, including Mumbai, Kolkata and Chennai, and laying off about 400 employees from its delivery department.

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