Runnr, which was formed as a result of merger of two high profile startups — Roadrunnr and TinyOwl, has raised $7 million in a new funding round. As per ETTech, Nexus Venture Partners and Blume Ventures have co-led this round.
Notably, Sequoia Capital, which was an early investor in both startups, RoadRunnr and TinyOwl, has not participated in this new funding round.
As per the report, investors who had invested in Roadrunnr, are also likely to come on board for Runnr. The investors include German internet entrepreneurs Samwer brothers’ Global Founders Capital and Apoletto Managers, a personal investment vehicle managed by Yuri Milner’s DST Global’s partners.
Several angel investors, including former Flipkart executive Ankit Nagori, and Freecharge founders Kunal Shah and Sandeep Tandon, are also expected to join in.
Both startups had raised massive funding rounds, but were unable to raise further funds. Thus, Roadrunnr acquired TinyOwl in a share-swap transaction helmed by its common investors in June this year.
The acquisition marked the first major consolidation in hyperlocal delivery space which has only been witnessing shut downs so far despite being a hot favorite of investors last year.
Post TinyOwl’s acquisition, Roadrunnr pivoted its business into food delivery market with a bigger focus on the consumer side. Before the acquisition, the company was focusing on business-to-business model.
Runnr is currently focusing on tapping corporate employees across cities in a bid to maintain consistent daily order volume, margins and unit economics.
It is running a pilot program across 40 offices in select areas of Bengaluru. It allows employees to order lunch from a curated selection of dishes from five to six restaurants in select areas. It currently claims to be getting around 1,000 orders per day.
Currently, Runnr is competing with bigger rivals like Swiggy, Zomato Order and Foodpanda. Swiggy is fulfilling close to 40,000 orders per day, while Zomato has taken the approach of focusing on high average-order values and is avoiding heavy discounts.