TinyOwl downward spiral quickens, shuts operations everywhere except Mumbai

Started with much fanfare and backed by marquee investors like Sequoia, Blume Venture Partners, Matrix Partners and Nexus Venture Partners, TinyOwl's journey to its current state doesn’t fail to send shockwaves across the startup world. According to reports by TechCrunch and MediaNama, TinyOwl has now stopped services in all cities except Mumbai. Last November, the team had stopped services in Chennai, Pune, Hyderabad and Delhi, retaining its operations only in Bengaluru and Mumbai.

Once touted to be amongst the fastest-growing food tech and food app startups, TinyOwl today seems to be grasping at straws. The company's downward spiral, which began last September, seems to have no end.

From having its presence in eleven cities, to now in just one, the food delivery app had started sending notifications to users last week that the service will be discontinued after May 22. Reports in Medianama suggest that this notification was available across different locations, except a few areas of Mumbai.

This current move by TinyOwl could be in accordance with the current reports of the merger between Roadrunnr and Tinyowl. According to a report by The Economic Times, the merger is an all-stock deal. The report suggested that the combined entity will build a strong consumer-facing product, with Roadrunnr taking on Swiggy and Zomato.

It also suggested that Roadrunnr has already on-boarded the data analytics, sales, technology, support and management team at TinyOwl. Over the past few months, several on-demand startups were in the news for reasons of consolidations or corrections. Ironically, the same time last year these very startups were a source of news for picking up heavy funds.

There were talks of DST Global funding Roadrunnr. However the investor backed out for various unknown reasons. But reports in the Economic Times suggest that the deal is still being finalised and is likely to be sealed soon. Both startups have raised a total combined amount of $50 million.

Sequoia Capital and Nexus Venture Partners are common investors in Roadrunnr and TinyOwl. The reason for merging the two is believed to be a final attempt at give them a new lease of life, as fresh funding looks difficult with their independent operations.

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