Online food delivery service TinyOwl has raised Rs 100 crore in series B funding from Matrix Partners, Sequoia Capital and Nexus Venture Partners, reports TechCruch. The Mumbai-based startup raised $3 million in a series A round of funding from Nexus Venture Partners and Sequoia Capital earlier in last year.
Currently active only in Mumbai, the company has an aggressive expansion plan and wants to roll out to 50 cities in India before the end of the year. TinyOwl’s service allows customers to order take-out via its iOS and Android app. It also has two products; TinyOwl for food from nearby restaurants and TinyOwl HomeMade for healthy food from local chefs. Users can either make payments through their credit card or opt for cash-on-delivery. TinyOwl also says that it take about 3,000-5,000 orders per day and covers about 4,500 restaurants.
Here’s our math
TinyOwl has a team of 400 plus people and is currently active only in Mumbai, and if it wants to follow through its expansion plan, then its going to be an uphill task. We feel that most of the funding will be used up for paying salaries and administrative functions. Here’s our rough estimate and is in no way completely accurate: Rs 100 crore divided by 400 employees gives us Rs 25 lakh per employee. That divided by about 12 months gives us about 2.08 lakh.
We know that number is a bit too high to be giving as a salary figure for an individual employee, but once you factor in the administrative costs and rent for the offices, we don’t think the round of funding would be able to fuel their growth plan. We’re basing this assumption on the fact that Zomato, following their acquisition of Urbanspoon, is looking for another round of funding to expand in the U.S. and is looking to hire 200 people for the same. We’ve reached out to TinyOwl’s PR team for a comment and will update on the same.
The startup also does not have any revenue streams but did mention to TechCircle that it will be charging a commission of 10-20% to restaurants later this year.
Zomato has mentioned that it will be rolling out food delivery this year and the company already has presence in 36 cities in India. So TinyOwl will have to make a move quickly against them.
There’s also Rocket Internet-backed FoodPanda which took over UK-headquartered JustEat’s India operations. This deal was worked out sometime after FoodPanda had acquired Delivery Hero-backed TastyKhana in November last year.
On home-cooked meals, there’s Mumbai-based Holachef which raised Rs 2 crore funding from India Quotient.