TinyOwl shuts services in a few regions


Mumbai: Mumbai-based food ordering company TinyOwl Technology Pvt. Ltd has sent out an official update that it would discontinue operations in all locations other than Mumbai. The news was first reported by digital news agency MediaNama on Monday.

“This move is part of the rebranding exercise as we are looking to relaunch the app as a full delivery service,” said Harshvardhan Mandad, co-founder of the company, in a phone interview. As part of the branding, the new entity will have a new logo, with new colour schemes representing its delivery function.

Mint reported this month that TinyOwl and logistics firm Carthero Technologies Pvt. Ltd (Roadrunnr) will start operating as a combined company called Runnr by the end of May.

The merger will strengthen the front and back end for the combined entity, Runnr, to compete with rivals like Swiggy and Zomato Order. This deal will help Roadrunnr get access to users. The two have common investors in Sequoia Capital and Nexus Venture Partners, both of which helped push through the deal.

TinyOwl and Roadrunnr together have raised around Rs.280 crore in funding since inception.

The new brand will be launched in the next one month. Currently, the app is operating under the brand name of Tinyowl in a few areas in Mumbai, and over the next two to three months it will relaunch operations across Mumbai and Bengaluru under the new brand name.

“By the end of the year we plan to launch in a few localities of Pune and Delhi depending upon market size,” added Mandad.

The company intends to convey to existing users that the new brand will be a full-fledged delivery company. TinyOwl is a food ordering app and deliveries were fulfilled by the restaurants (catering to demand), which would not be the case with the launch of the new brand.

The new brand aims to generate cash through two streams. First, the delivery business, for which it will charge restaurants Rs.45-60 per order. Second, it will charge a 10-20% commission fee for lead generation.

The new entity will focus only on food delivery at the start. Roadrunnr is also looking to exit its delivery services for e-commerce companies and focus on a few select categories such as food, groceries and merchant-to-merchant, or first-mile, connectivity.

Currently, Tinyowl has on board 100 employees and all of them will be retained as part of the deal. “The technology, userbase and the backend of the app will remain the same,” said Mandad.

According to a report by Kotak Institutional Equities, the food delivery and takeaway market in India was estimated at $12.8 billion in 2014, but the online food delivery market size is only around $95 million 0.7% of that.