UPDATE :
Fellow writer Deepanshu Khandelwal now tells me, that sources from within TinyOwl have confirmed The Hindu Business Line Report as baseless. While the company may be in the process of raising fresh funds, but acquisition is off the charts right now.
We’ll keep you updated with this if there are any further developments.
PREVIOUSLY :
India’s food delivery segment saw a surge, to de-clutter this massively fragmented segment in the country. However, in the process, the startup ecosystem in this particular segment started to look cluttered in itself. Now that, might soon change.
In one of the first major indications of market consolidation in the food delivery segment, Rocket Internet-backed FoodPanda is in final stages of acquiring Mumbai-based TunyOwl, reports The Hindu Business line.
FoodPanda has been busy shopping food-delivery startups across the globe these past few months. Just a few months ago, Rocket Internet, the company backing FoodPanda, bought seven Asian food based companies.
The company had also acquired TastyKhana in November and JustEat India in February. Following these developments, there were many rumours that FoodPanda would be gulping down all smaller rival companies. And by the looks of this report, it looks all set to acquire perhaps its biggest rival in India.
Mumbai based food delivery service, TinyOwl, started up last year and has since received decent capital from VCs. Just a few months ago, the startup raised $15 million in a series B round led by Matrix Partners, making it one of the more heavily-funded food delivery startup within the country.
However, if recent reports are to be believed, rising cash burn and shortage of further investment were making things difficult for the company, perhaps resulting in this acquisition.
Sources also say that FoodPanda is all set in the game, backed by $110 million from the intensely deep-pocketed backer, Rocket Internet.
FoodPanda is gunning for market share and wants to strengthen its base so as to compete with Zomato globally. said a person close to the development.
TinyOwl’s metric have been impressive in though. The company expanded to over 4,000 restaurants in Mumbai and covers over 2,000 orders a day, driven entirely by their smartphone app. Users can opt for paying via credit/debit cards or cash-on-delivery, whatever they find convenient. The service was, initially running on a no profit basis but that was slowly changing as they were starting to charge a 10% to 20% cut to the restaurants that signed up with the TinyOwl.
According to experts, food-tech has already been dominated by 3 key players and is completely overcrowded with no more place for underdog startups. The 3 key players referred here are Zomato, FoodPanda and Swiggy.
Last year alone, a whopping 60 odd startups came up in this ₹89,500-crore sector of the market. This, according to investors, will lead to a lot of consolidation and TinyOwl seems to be one of the first pearls of that string.
Moreover, as this segment gets inflated and cluttered, startups will find it difficult to raise fresh capital thus leading to even more acquisitions and consolidations.
