With Zomato, TinyOwl and several other food tech startups laying their employees off or scaling down their operations, the struggle for fund raises in the segment has become quiet evident. In the midst of all that, Faasos Food Services, which owns online restaurant Faasos, has grabbed a massive $30 million in an investment round led by Russian internet-focused investment firm ru-Net.
Despite the investor attention which food tech segment managed to garner in its nascent stage, startups are now struggling to manage funds to power their operations. SpoonJoy, a Bengaluru-based food ordering app, shut operations in Delhi, while Dazo, a TinyOwl-styled app, completely shut their operations down.
Restaurant discovery and food ordering company Zomato too said recently, that it will cut less than 10% of its workforce.
TinyOwl let go another 112 employees, stating restructuring and cost cutting as reasons. In September, TinyOwl laid off about 200 employees, many of them from its sales and delivery teams. However, the company sort of recovered from that slump when it recently raised a bridge round of over $7.5 Million.
We have infinite examples on how the food tech segment is dwindling and craving for more funds. Amidst this hard time, Faasos has raised $30 million, which values it in the vicinity of $130 million-$160 million.
Existing investors including venture capital firms Sequoia Capital and Lightbox Ventures participated. Faasos plans to use this newly infused fund money for acquisitions and to begin operations in Kolkata, Chandigarh, Dehradun and other cities.
Furthermore, it plans to expand its Indian presence and build new services such as Faasos Daily, a new mobile application for time-slotted food deliveries.
ru-Net, which led this investment round, also invested in Snapdeal and Snapdeal-owned FreeCharge and on-demand grocery delivery startup PepperTap.