Hostage situation at TinyOwl resolved, co-founder back in Mumbai
The hostage situation at TinyOwl Technology Pvt Ltd's Pune office has been resolved, company CEO Harshvardhan Mandad said in a media statement on Thursday night.
Medianama, which first reported the hostage crisis, said that TinyOwl co-founder Gaurav Choudhary headed to Mumbai on Thursday night. The 24-year-old Choudhary and a colleague were held hostage at TinyOwl's Pune office since Wednesday by about 30 irate former staffers who were recently sacked. They demanded full and final settlement of their dues.
"We have had a long day in resolving a critical situation in Pune wherein two of our employees had been made to stay back in office for over 48 hours. We have been able to resolve this and have immediately started working on considering the demands beyond the terms of employment, placed forward by other employees from other cities," Mandad said in a media statement.
"We request you to please give us some time to first address our employees concerns. Post that we will be more than happy to answer any queries you may have." he added.
Additional details on the development could not be immediately ascertained.
Gautam Mago, MD at Sequoia Capital, one of TinyOwl's investors, did not respond to a Techcircle.in query.
How it unfolded
On November 2, Mumbai-based TinyOwl said it was laying off 112 more employees in its second such move in two months, as part of measures to make business viable.
A day later, TinyOwl co-founders Harshvardhan Mandad, Saurabh Goyal, Shikhar Paliwal, Tanuj Khandelwal and Choudhary travelled to Chennai, Pune, Hyderabad and Delhi offices. Their message to employees: Take post-dated cheques and agree to quit work.
The move seemed to have worked in its Chennai, Hyderabad and Delhi centres. However, employees in Pune demanded full and final settlement. They claim to have lost trust in the company's top management.
"If you're being laid off, the salary has to be credited into your account immediately. During the last layoffs, salaries were credited within 48 hours. This time they're saying we don't have the money. If you don't have funds, how can you commit?" one employee told Medianama.
Many staffers were incensed as the layoffs were announced a few days after TinyOwl raised $7.5 million (Rs 50 crore) in fresh funding from existing investors Sequoia Capital and Matrix Partner
Local politicians, too, had jumped into the fray, demanding full and final settlement on behalf of the laid-off employees. Police protection was called for by Choudhary, but the drama continued until Thursday evening.
In September, TinyOwl had sacked about 100 staffers.
The mobile-first venture was founded in 2014 and had raised $15 million (Rs 93 crore) in Series B funding from investors led by Matrix Partners early this year. Existing investors Sequoia Capital and Nexus Venture Partners also participated in that round.
Challenges in food-tech
The online food ordering business in India is estimated to be worth around Rs 5,000-6,000 crore, growing at about 30 per cent month-on-month, according to a report by India Brand Equity Foundation. However, this segment is transaction-driven and margins are wafer thin.
It has been a year of mixed fortunes for the food-tech startups. A few startups have shut shop or have downsized operations.
According to some estimates, about half of the food-tech firms operating in India started in the past year. As per VCCEdge, 19 food-tech startups have raised about $160 million in venture capital funding so far in 2015. Only five companies managed to raise money twice.
Broadly, startups in the sector can be categorised on the basis of the three main business models. The first set comprises ventures such as TinyOwl, which provide software-only marketplaces that act as selling points for restaurants. The second group includes hyper-local food delivery services like Foodpanda and Swiggy, which bring the traffic and manage the logistics. Finally, there are full-stack food businesses like Food Vista and Brekkie.