Food-tech startup TinyOwl has secured $7.6 Mn (INR 50 Cr) from existing investors Sequoia Capital and Matrix Partners.
With the new round of funding, Tinyowl gets 12 months runtime to manage the turmoil in the company. In the meantime, the company will focus on restructuring its processes in order to create a sustainable business.
Harshvardhan Mandad, Founder and CEO of TinyOwl told ET, “In lieu of restructuring we have fully outsourced our last mile delivery to partners including Roadrunnr, Opinio and Shadowfax. This move has helped us focus sharper on our core technology and processes as well as significantly cut costs of delivery.”
Mandad reported that the company’s costs has come down by 43% with the realignment.
TinyOwl was reported to have fired 160 employees in pursuit of reducing the costs and re-looking at its business operations.
Earlier this year, it raised roughly $15.3Mn (INR 100 Cr) from Matrix Partners India, Sequoia Capital and Nexus Venture Partners.
TinyOwl was started in 2014 by IIT-Bombay graduates Harshvardhan Mandad, Gaurav Choudhary, Saurabh Goyal, Shikhar Paliwal and Tanuj Khandelwal. Currently, it is operating in six cities including Mumbai, Hyderabad, Pune, Bangalore, Delhi(NCR) and Chennai with further plans to expand to 50 cities by the end of this year.
It is said to receive around 3000-orders daily. It started with both restaurant and home-cooked food delivery service.
TinyOwl directly competes with FoodPanda, Zomato and Swiggy in the same domain. However, food-tech space is highly crowded and a low margin space catering to almost everything under the sun from delivering food to beverages. Other players in the domain include Holachef, Yumist, Biteclub, FreshMenu, Leaping Caravan, Dishco, Jolly Food Fellow, Bueno Food, Eatlo, Box8, Innerchef and more.
Some recent investments in this space by other players of the domain include:
- Mumbai-based Holachef, raised $3.1 Mn from Kalaari Capital and India Quotient. Tata Gorups Chairman Emeritus, Ratan Tata also invested undisclosed amount in this round.
- Swiggy, raising $16.5 Mn in Series B round of funding from Norwest Venture Partners (NVP), SAIF Partners, Accel Partners and more
- Biteclub raised around $500K in funding from Powai Lake Ventures and angels including Aneesh Reddy, Ashish Kashyap & Alok Mittal.
- Eatlo raised second round of angel funding from Powai Lake Ventures, Globevestor and Abhishek Goyal of Tracxn Labs.
- InnerChef raised $1.66 Mn in its pre-series A round of funding from angel investors.
- Yumist raised $1 Mn from Orios Ventures.
However, all’s not well with the food tech industry. After TinyOwl, Zomato fired over 300 people in restructuring. Bangalore-Based Dazo had to shut down its operations and FoodPanda was under surveillance for operations mismanagement.