Roadrunnr, TinyOwl to merge and launch ‘Runnr’
Roadrunnr-the Bengaluru-based hyper-local logistics firm and Mumbai-based TinyOwl-the food-ordering platform are merging in an all-stock deal. Reportedly, both the firms are going to start a brand new food-delivery called 'Runnr' within three weeks to take on Swiggy and Zomato. Roadrunnr bought TinyOwl's brand name, technology, management team, data analytics, support, and sales. Sequoia and Nexus VP are common investors of Roadrunnr and TinyOwl.
What is TinyOwl?
TinyOwl is a food-ordering platform, which was founded in 2014 by five IITB alumni- Harshvrdhan Mandad, Shikhar Paliwal, Gaurav Choudhary, Tanuj Khandelwal, and Saurabh Goyal. It had started as a simple food-ordering app with a seed capital of $1 million. TinyOwl is backed by venture capital firms like Matrix Partners, Sequoia Capital, and Nexus Venture Partners, who have made investments of about $28 million.
Foodpanda's plans to acquire TinyOwl
In Aug'15, it was reported that the Germany-based Foodpanda would acquire the Mumbai-based TinyOwl to strengthen its position in the market. In a bid to compete against its rival Zomato, Foodpanda was also planning to invest in Swiggy.
TinyOwl’s money runs out, sacks employees
In Sep'15, TinyOwl had sacked over 300 employees as a part of its restructuring process. The firm stated that its business was growing and would hire about 150 people to expand its technology, design, consumer experience, etc. Despite a lifeline investment of $7.5 million from its investors, the company's funds had dried out. Reportedly, TinyOwl was trying to raise money by offering company stakes.
TinyOwl shuts down business in several cities
TinyOwl offices in Pune, Delhi, Hyderabad, and Chennai were shut down; the Mumbai and Bengaluru offices were kept active. TinyOwl Pune employees had held one of the co-founders, Gaurav Choudhary, hostage for two days and demanded a two-month-notice-period and salaries of two months. Nothing went well for TinyOwl, and it had to shut down its Bengaluru office in Dec'15 to sack more employees.
Roadrunnr, TinyOwl in talks to strike a deal
Roadrunnr and TinyOwl were in early talks to merge in an all-stock deal, according to four involved executives. One of the common investors had stated that an idea of combined entity was being discussed but, both the firms needed to sustain operations for ten months at least. The investor added that if all goes well, the combined entity might raise $40 million in fresh-funding.
Combined entity could explore other discliplines
It was reported that if both the firms successfully strike a deal, the combined entity could enter various other disciplines including food ordering, delivery services, launching bike taxi services, etc.
What is Roadrunnr?
Roadrunnr is a hyper-local logistics company, which was founded on 15 May 2015 by two ex-Flipkart employees-Mohit Kumar and Arpit Dave. Roadrunnr is headquartered in Bengaluru and owned by Carthero Technologies. In July 2015, Roadrunnr had raised $11 million funds from Sequoia Capital, Nexus Venture Partners, and Blume Ventures, which was expected to be used in expanding Roadrunnr's service and improve its technology.
TinyOwl wouldn’t be shut down immediately
According to a senior executive of Roadrunnr, they would hold onto the company's logistics capabilities and use TinyOwl's technology and customer experience to differentiate and rate themselves more efficiently that their competitors. TinyOwl wouldn't shut down immediately (especially in high-order-volume areas) but, would be phased-out slowly to 'Runnr'. The terms of the deal are also expected to be finalized within the next three weeks.