Hyperlocal grocery delivery service PepperTap will be shutting down its operations in six Indian cities, which include three metros.
The Gurgaon-based startup is ceasing operations in Ahmedabad, Chandigarh, Mumbai, Kolkata, Chennai, and Jaipur, and will lay off nearly 400 delivery staff from its fleet. A spokesperson told Gadgets 360 that only fifty of them were on payroll, and the rest were on contract.
Navneet Singh, CEO of PepperTap, in an emailed statement said the startup has decided to focus on depth rather than breadth, given the short to mid-term investment climate outlook."We are digging our heels in for the long term. We will focus on building a stellar customer experience by providing additional categories and services that differentiate us from our competition in cities where we continue to operate." he said.
PepperTap will continue to operate in Delhi, Noida, Pune, Hyderabad, Ghaziabad, Gurgaon, Bengaluru, and Faridabad, the company said.
(Also read: PepperTap Review: Great for Groceries, but Better Than Grofers?)
The startup had closed its Series B round in December 2015, with investors including Sequoia Capital, SAIF Partners, Snapdeal, BEENEXT, ru-Net Holdings, and JAFCO Asia.
PepperTap provides free delivery on orders above Rs. 350 through its apps and website, in under two hours. Its decision to scale down its operations signals a lack of traction for the sector, following a similar scaling down of operations from competitor Grofers in December 2015.
PepperTap's competitors include Bigbasket, Flipkart Nearby, Grofers, Ola Store, and Terraa. Mumbai-based LocalBanya had temporarily ceased operations in October 2015, and hasn't launched its operations yet.
E-commerce giant Amazon had recently launched a pilot program for two hour deliveries on household items in Bengaluru earlier this month.