PepperTap to shut down operations.

[dropcap]G[/dropcap]urgaon-based hyper local delivery startup PepperTap announced that it was its closing grocery delivery operations in the next one month as the struggle to remain afloat in the online grocery business seems to have had its first stooge.

The stockless delivery business reportedly will focus exclusively on its e-commerce logistics business. Last year the company rolled back operations in Agra and Meerut after a month-long pilot failed to materialize.

Run by Nuvo Logistics Pvt Ltd, PepperTap started as a reverse logistics company. Its largest customers are e-commerce companies and the division competes with other logistics firms like Delhivery, Ecom Express, Parcelled and others. PepperTap already runs a reverse logistics arm through its parent company Nuvoex Logistics Pvt. Ltd.

Reportedly, lack of demand and unviable unit economics (viability of each transaction) led to the decision and sacking of 200 of its employees. The shuttering of PepperTap had been in progress for few months now. The company had extended appraisal letters to employees promising them salary hikes that would help to bargain from a position of strength when they go out.

In February, PepperTap had shut operations in six cities – Ahmedabad, Chandigarh, Mumbai, Kolkata, Chennai and Jaipur.

The closure will hit Nuvoex the most as Snapdeal has been Nuvoex’s biggest customer triggering an investment of around $35 million last year. AfterAmazon launched Fresh, Snapdeal had been hoping PepperTap would help it monetize the segment. Peppertap plans to aggressively build forward logistics technology to complete the whole B2B stack,

Founded in 2013, PepperTap has some big rivals that have been gone on a fundraising spree in the past few months.

In March, Bengaluru-based grocery portal BigBasket raised $150 million in funding led by Dubai’s Abraaj Group. Grofers too raised $120 million led by Softbank earlier this year. However, Grofers has also shut down operations in nine cities, including Ludhiana, Bhopal, Kochi, Coimbatore and Visakhapatnam earlier this year.