Case Study: Peppertap

According to a survey-based study conducted by the IBM Institute of Business Value and Oxford Economics, 90% of Indian startups fail with the first five years of operation, this phenomenon was attributed to the observation that there was a lack of pioneering innovation present in the Indian startup ecosystem. One such
company with a short lifespan was PepperTap, a Gurgaon (India)-based grocery delivery venture.


Launched in 26th November 2014 by Miland Sharma and Navneet Singh, both were former employees of Delhivery, a logistics firm. At its peak, PepperTap operated in fifteen cities. According to their official Linkedin page, they were a mobile-first, on-demand grocery delivery with over a thousand employees and processed over 40,000 orders on a daily basis. Additionally, they claimed that all deliveries would be completed within two hours of an order being placed. It was no surprise that the way the company was positioned and its lofty claims piqued the interest of prominent investors, with the company raising about $51.2 million across its
lifetime.


It should be noted that on December 2015, PepperTap had acquired Jiffstore, a small-scale Bangalore based e-commerce platform.


Despite interest among investors and a relatively good start (with them claiming to ship around 20,000 orders each day in December 2015), PepperTap found it hard to survive in this highly competitive landscape, with giants like Bigbasket giving them a hard time. The involvement of big players such as Paytm and Flipkart in the on demand grocery delivery service market had thrown a wrench into any plans of expansion PepperTap had. Reports of critical flaws regarding the usability of their app and integration technology also began to surface around this time, along with this, the company was burning through money as they offered huge discounts which was deter mental to the company as they operated on a inventory-less model (ie, they were paying MRP retail prices while charging customers substantially lesser). As they lacked a solid strategy or any unique selling point when compared to their competition with a lack of any substantial revenue or profit, PepperTap ceased all operations by early April 2016 citing increasing competition; this was a week after they laid off 200 of their employees. In other words, they were unintentionally built on a flawed business model which contributed to their downfall.


After this debacle, the original founders have moved on to start a more sucessful company called NuvoEx, which catered to the niche logistics services sector, focused on solving the reverse flow problems prevalent in the Indian ecommerce industry. This new venture of theirs was acquired by Shadowfax, a Bangalore-based logistics network around October 2017.



List of major stakeholders with investments in PepperTap:
- Sequoia Capital
- SAIF Partners
- InnoVen Capital
- JAFCO
- Snapdeal