TinyOwl Now Operating Only In Mumbai, Has Started Working On Integration With Roadrunnr

Restaurant delivery service TinyOwl, which till recently counted among the leading hyperlocal startups in India, has officially stopped its services in all cities of the country except for one. The company started sending notifications regarding the discontinuation of service to its users last week, and, on May 22, stopped its services in all locations, barring for a few areas in Mumbai. At one point in time, the startup had operations in 11 large cities in India. However, after its announcement in November last year that it is shutting down operations in Chennai, Pune, Hyderabad and Delhi, its services were available only in Mumbai and India’s tech capital Bengaluru.

After this news broke out, there were speculations that the company is running out of money and might close down soon. However, in a phone interview to financial newspaper Live Mint on May 23, Harshvardhan Mandad, one of the co-founders and CEO of the company revealed, “This move is part of the rebranding exercise as we are looking to relaunch the app as a full delivery service.”

Founded in March 2014 by five graduates from the prestigious Indian Institute of Technology, Bombay, TinyOwl has till date raised over $27 million in several funding rounds from investors including Sequoia Capital, Nexus Venture Partners and Matrix Partners. The company was embroiled in controversy last November when one of its co-founders Gaurav Choudhary was held hostage in Pune for two days by TinyOwl’s employees, who demanded that the company gives an explanation regarding shutting down of its operations in the city and clear their dues.

Merger With Roadrunnr

Earlier this month, reports emerged that TinyOwl is in talks with Carthero Technologies Pvt. Ltd (Roadrunnr) for a potential all-stock merger. Although the companies didn’t confirm it then, in an interview given to digital news website MediaNama on Monday, Mr. Mandad divulged that a deal is underway, saying :

” We’re relaunching our services with full delivery, and we’re going with Roadrunnr for this. The deal is not yet closed but the intent is there from both the companies. We’ve started working on the integration, that is why this service update. We’re launching in some localities where we have the delivery fleet and others will get updated when we launch the new service. This will be sequentially and not parallely. We cannot launch in 6 cities in one go and this is a practical call to take, to improve the kind of service and delivery.”

On being asked when will the company be relaunching its service in other cities, Mr. Mandad said that within 2 to 4 months the service will again be operational in Mumbai, Bengaluru and parts of other cities. While he refrained from naming the other cities, he did reveal that the company is going to start operations only in areas where the unit economics makes sense. Mr. Mandad was also asked about whether the company is looking to raise funds and how much money from the previous round of funding is still unspent, to which he replied, ” We’re looking to raise funds, yes. We have money, we have our runway till December 2016.”

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