Bangalore-based Carthero Technologies Pvt. Ltd that has been operating hyperlocal on-demand logistics startup Roadrunnr has acquired troubled food ordering platform TinyOwl and rebranded itself as Runnr, a food ordering and delivery platform, it said in a statement.
"After the acquisition of TinyOwl, the company has decided to reposition itself as a customer-centric platform and launched an app called Runnr which is now available on iOS and Google Play Store," it said.
However, it will continue to offer its business to business (B2B) logistics offerings, a company spokesperson said.
As part of the transaction, the 90-member TinyOwl team is now part of the new entity.
Currently, Runnr Food-ordering app is available only in South Mumbai with over 150 restaurants. The app offers live tracking of delivery and there is no minimum order size.
The spokesperson said the firm plans to focus on the Mumbai market.
"We are delighted to announce our new customer-centric avatar Runnr where we aim to set a new benchmark for food delivery in India. The application comes with complete order management, easy booking, live order tracking and on demand delivery," said Mohit Kumar, CEO of Runnr.
The move comes less than a month after media reports said TinyOwl is merging with Roadrunnr. Talks of a possible merger were first reported by The Economic Times in March. Though media reports attributed the development to sources familiar with the development, CEOs of both the firms declined to comment about the proposed merger.
The development assumes significance in the light of the constrained funding scenario in the startup ecosystem and is an indicator that consolidation is picking up in the consumer internet space. According to industry observers, the merger is also a sign that the Indian startup ecosystem in moving towards maturity.
Mumbai-based TinyOwl initially elicited a lot of interest from investors who expected it to emerge as a key player in the food-tech space in the country. However, as it began to offer heavy discounts to lure customers, cash burn significantly surged, forcing it to lay off more than 200 employees in a bid to cut costs. Following the layoffs, TinyOwl co-founder Gaurav Choudhary was held hostage at the startup's Pune office for more than a day by a group of former staffers who asked the firm to settle the dues it owed. While the startup managed to raise $7.5 million (Rs 50 crore then) from existing investors Sequoia Capital and Matrix Partners in October 2015 after the initial round of layoffs, it failed to raise further funding.
Founded in 2015 by former Flipkart employees Mohit Kumar and Arpit Dave, Roadrunnr started off as a provider of hyperlocal logistics services to merchants, restaurants and e-commerce companies, enabling them to deliver orders by connecting with a local delivery fleet. It also partners with students and drivers, among others, to provide delivery. It differs from other aggregators by charging merchants a flat fee based on their shipment size rather than the value of the order.
In July 2015, Roadrunnr had raised $11 million in Series A funding from Sequoia Capital, Nexus Venture Partners, Blume Ventures and others.
The online food ordering sector in India is estimated to be worth around Rs 5,000-6,000 crore, according to a report by India Brand Equity Foundation. However, the segment is transaction-driven and margins are wafer-thin.
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