Exclusive: Accel-backed Deep Rooted to shut operations

Farm to fork startup Deep Rooted has decided to shut down its operations, according to three people aware of the matter.

Started as a B2B business, Deep Rooted used to manage 100 acres of greenhouses and supply vegetables and fruits to over 120 restaurants in Bengaluru. However, the company pivoted to B2C after covid.

"Deep Rooted struggled to establish a consumer-focused model and, in early 2024, shifted back to a B2B approach on quick commerce platforms like BlinkIt and Zepto. However, it failed to achieve substantial scale there as well," said a source requesting anonymity. 

Deep Rooted raised over $18 million including $12.5 million Series A funding from IvyCap Ventures, Accel, Omnivore, and Mayfield in September 2022. According to startup data intelligence platform TheKredible, Accel is the largest stakeholder in the company followed by IvyCap and Omnivore. 

"Without a viable business model, the company was unable to secure follow-on funding and ultimately decided to shut down operations," said another source who also wished not to be named.

Queries sent to Deep Rooted and Accel remained unanswered. The story will be updated if they respond.

Deep Rooted's struggles were also reflected in its financial performance in the last fiscal year. Its revenue from operations declined by more than 57% to Rs 34.37 crore in FY24 from Rs 80.97 crore in FY23. During the period, its losses increased slightly to Rs 52.21 core from Rs 47.07 crore.

This will be the second major company in this segment that has struggled to thrive. Previously, Fraazo shut down its operations despite raising $65 million from investors such as WestBridge Capital, Sixth Sense Ventures, Equanimity Investments, and Apar Group.

Otipy, which is also backed by WestBridge Capital, along with other companies like Pluckk, Gourmet Garden, and Kisankonnect, operate in the same space.