After Raising $40mn, PepperTap Shuts Down Grocery Business; Goes Back To Logistics

PepperTap which raised $40mn in Series B last year (from Snapdeal, Sequoia, SAIF and others) has shutdown its grocery business.

We earlier reported the company was shutting down the business in Mumbai, Chennai and even laid off 400 employees in Feb, 2016.

PepperTap Financials

PepperTap, owned by Nuvo Logistics (which also runs Nuvo Ex, the logistics arm) reported a total revenue of INR 19.5 crores in FY 14-15 with a net profit of INR 87 lacs (see Peppertap financial data). The revenue largely comes from its logistics arm and the company (after experimenting with grocery) is going back to its roots.

PepperTap : Badly Executed Grocery Business?

With only 3.6 rating in the app store, a quick look at PepperTap review suggests several issues – ranging not just from technology backend but delivery as well.

Who is next?

#IndianStartupData : Nuvo Logistics (PepperTap) Made A Profit Of INR 87 lac With A Revenue of INR 19.6cr in FY 14-15

[Editor Notes : Nothing is as powerful as data and these articles are part of our coverage of #IndianStartupData – i.e. an overview of financial performance of selected Indian startups with a belief that it gives the audience a good picture of the companies and the ecosystem in general.]indianstartupdata

Pepper Tap is an on-demand grocery delivery service based in Gurgaon, India. It is owned and operated by Nuvo Logistics Private Limited and was incorporated in August 2013. Nuvo Logistics also owns and operates Nuvo Ex which provides reverse logistics services to e-commerce players.

Note that the below numbers are not of PepperTap alone, but of Nuvo logistics (i.e. the combined entity).

The company reported a total revenue of INR 19.5 crores in FY 14-15 with a net profit of INR 87 lacs. This was only their second year of operation. In FY 13-14, the company had registered a total revenue of INR 61 lacs with net loss of 41 lacs.

All of their revenue from operations is recognized from sale of services. Almost all of it is reported as ‘Courier Service fees’ with a miniscule amount reported as ‘Platform and logistic services’. A major proportion of this revenue must be attributable to Nuvo Ex since PepperTap had not started its operations before November 2014.

Nuvo Logistics Revenue PAT Chart 2

There is no clarity on the revenue split between the two companies.
FINANCIAL PERFORMANCE

In comparison, Grofers (one of its biggest competitor) had reported a revenue of INR 86 lacs with a loss of INR 4 crores in the same period. Another competitor Zop Now, which operates on an inventory based model, reported a revenue (all of it from sale of goods) of INR 8.8 crores with a net loss of INR 3.7 crores in the same period. Big Basket is another major competitor of PepperTap in this space and are yet to release their numbers.

Nuvo Logistics Expenses Breakup Chart 2

Out of a total expenses of INR 18.4 Cr in FY 14-15, almost half of it was incurred on Employee benefit. Transportation and handling charges accounted for 21% of their total expense. Surprisingly, marketing and business promotion expense remained low at less than 4% of total expenses.PepperTap logo

FOUNDERS

Nuvo Logistics started as a logistics e-commerce company. It was founded by Navneet Singh and Milind Sharma, both of them working with Delhivery prior to founding Nuvo. They started operations with Nuvo Ex, which provides reverse logistics services to e-com players and later conceptualized PepperTap and launched its operations in November 2014. Nuvo Ex is still operational (http://www.nuvoex.com/).

FUNDING

First institutional investment in the company came from Sequoia Capital in December 2014 (nearly 1.5 years after company formation), followed shortly by SAIF Partners. Snapdeal (an e-commerce company) is also heavily invested into the company.

Following is a summary of their major funding rounds so far:

Date Investor Investment Amount (INR crores)
December 2014 Sequoia Capital

5

April 2015 SAIF Partners

31

Sequoia Capital

31

September 2015 Sequoia Capital

53

Jasper Infotech (Snapdeal)

93

October 2015 SAIF Partners

33

BeeNext

13

JATF

13

Ru-Net South Asia

4.5

Kesriwood South Asia

18

Total

294.5

While the industry is trying to figure out the better model out of inventory based model and the marketplace hyperlocal model, giants like Ola, Flipkart, Amazon and Paytm are also beginning to delve into the space.Although it belongs to the newer crop of players, PepperTap has emerged as one of the front-runners in the space of online groceries delivery. They had added features like number disguising and order modification on their app few months back and acquired Jiffstore, a Bangalore based grocery hyperlocal delivery startup last month.

In a very recent development, Grofers recently shut their operations in 9 Tier-2 cities saying that smaller cities are not ready for hyperlocal business yet.

[About the author: Vishal and Anchal form the team that runs the Tofler blog. They like to explore and track companies, their performance and senior management. Tofler (tofler.in) is a Business Research Platform.]

PepperTap Acquires Jiffstore; Raises $4mn More To Close Its $40mn Series B

PepperTap in its first year of operations, apart from raising funds has made few more announcements at the end of the year. The roundup of the announcements are:

Closure of Series B Round of Funding: PepperTap has closed its Series B round of funding; with an additional $4 millon from Innoven Capital, in addition to the $36 million raised recently from SnapDeal, Sequoia India, SAIF Partners, Ru-Net, Beenext & JAFCO Asia. Total fund raise in PepperTap now stands at around $51.2 million.

Acquisition of Jiffstore : Peppertap has taken over Bangalore based hyperlocal grocery delivery startup, Jiffstore for an undisclosed amount. Jiffstore’s team will join PepperTap’s Gurgaon and Bengaluru offices. Peppertap aims to use synergies with Jiffstore to build an excellent customer experience.

PepperTap logo

Brand alliances and new product launches: PepperTap has been readily expanding its product offerings to provide a more satisfying grocery shopping experience to customers, and to offer a marketing channel to large FMCG companies.

Marketing initiatives for customer engagement: PepperTap has entered into marketing tie-ups with other start-ups who will collaborate with them in a cross-marketing activity to bring attractive gifts for the users.

Partners App: All poised to be the next big thing for vendors associated with PepperTap, this app will see two versions – one for organised retail chains and another for standalone vendors. By logging in, the business representative will be able to see a comprehensive picture of his performance with PepperTap. This in turn will allow him to take better decisions on stocks, quantities and inventory management.

Technology upgradation with new app features: Peppertap has enhanced the app-experience for its users. It recently introduced a Live Chat feature in the app.

Some Startups Are Celebrating Diwali With Unique Initiatives [Roundup]

Startups are celebrating Diwali with new and environment friendly initiatives this year which truly deserves a thumbs up!

Between November 9 and 15, PepperTap will offer a chance to its customers to associate with its Diwali campaign. As a part of its Share2Care campaign, it has tied up with non profit organisation MakeADifference in Hyderabad and Uplabdhi in Delhi to allow customers to donate clothes, stationery and toys.

peppertap

Navneet Singh, Co-Founder and CEO, PepperTap said, “After a thorough house cleaning, a lot of people are left with stuff that they don’t need – stationery, old clothes and toys that the children have outgrown. By associating with MakeADifference and Uplabdhi, we will pick up stuff that our customers want to donate from their doorstep and pass it on to the less fortunate. This CSR initiative is an attempt to make the festival special for everyone!”

Roadrunnr, a hyperlocal logistics company will be celebrating a Green Diwali by distributing plantable bookmarks with almost every delivery they make on November 11th and 12th. The bookmarks will be gifted in packed biodegradable envelopes. and will be given with every order across Bengaluru, Delhi and Mumbai.

roadrunnr

Customers can use the plantable bookmarks and plant it in a pot as per instructions printed on the envelope and in 10 days they can look forward to a small plant blooming.

Roadrunnr will also gift merchants it works with, bamboo plants in customized pots. These can be placed on the reception of their restaurants adding to the ambience and showing their support for a green Diwali.

Know more of these? Do let us know and we’ll add up.

PepperTap Brings Number Disguising and Order Modification Features On Its App

PepperTap has launched two new features, Number Disguising and Order Modification on its mobile application in order to raise the safety and convenience level.

The Number Masking feature on its backend application ensures that phone numbers of its end customers remain undisclosed to its delivery boys. Peppertap has tied up with Exotel, that pioneered this feature in India.

Now all customer calls will be routed through the company’s server. Delivery boys will get a click to call option on their mobile device and instead of the customer’s number, they will only be able to see a standard call centre number.

The Order Modification feature is also live on PepperTap’s application. It enables customers to change their current order i.e. add more products or remove them from the list, while it is in the order receipt stage.

PepperTap Raises $36 mn In Series B From Snapdeal, Sequoia, SAIF and Others

PepperTap, the on-demand hyperlocal grocery delivery service, has closed a Series B funding round of $36 million. The latest funding round was led by Snapdeal along with existing investors Sequoia India and SAIF Partners. The funding also saw participation from new investors like Ru-net, JAFCO, and BeeNext.

Additionally, PepperTap is in advance talks to expand this round by another USD 20 million from other financial investors. This second close is expected to happen in the next few weeks.

Speaking on the investment, Navneet Singh, Co-Founder and CEO, PepperTap, commented, “PepperTap has been on a hyper-growth track since its inception 9 months ago. From less than $1mn GMV run rate at the start of Fiscal Year 2015-16, we are solidly on track to end the year with a GMV run-rate of over $250mn. Investment by an established player like Snapdeal is a stamp on our asset-light, low burn business model and our execution track record. We look forward to leveraging Snapdeal’s experience to help our partner stores develop their capabilities and multiply their sales.”

Kunal Bahl, CEO of Snapdeal added, “We are excited to be entering into a strategic partnership with PepperTap. Navneet and his team have done a phenomenal job in building PepperTap into India’s leading grocery ordering platform. We look forward to working closely with PepperTap to make them very successful, leveraging the capabilities we have built in Snapdeal’s ecosystem.”