TinyOwl, Indian foodtech startup has announced it raising $7.5 million in fresh funding from existing investors Sequioa Capital and Matrix Partners. The startup has managed to raise funds despite sacking 100 employees as a means to restructure the company.
Founded in 2014 by Harshvardhan Mandad, Shikhar Paliwal, Gaurav Choudhary, Saurabh Goyal and Khandelwal, TinyOwl is an online food ordering app that has two offerings TinyOwl HomeMade to procure meals from local chefs and another service for food ordering from nearby restaurants.
The users of the app which is available on Android and iOS platform can pay through credit card or choose to pay on delivery. Quite lately, it started operations in Bangalore.
The funding is expected to give TinyOwl around 12 months of run-time to create a sustainable business and create a viable business model. Regarding the layoff and the fund-raising, Mandad said, ” From the last few months the company has been outsourcing its last mile delivery to partners such as Roadrunnr, Opinio and Shadowfax. This significantly helped us to solely focus on our core technology and processes along with helping us significantly cut down the delivery costs. With this step the costs came down by 43%.”The mobile-first venture raised $15 million in Series B funding led by Matrix Partners early this year which was considered to be the biggest deal in the food-tech space.
In India, the online food ordering business is estimated to be worth around $75 million to $85 million, growing around 30% month-on-month according to the study by India Brand Equity Foundation. However, this space is transactions-oriented and margins can be a wafer for food tech companies.