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Roadrunnr, TinyOwl Start a Trip Together


Hyperlocal logistics co and food-ordering platform to merge in in an all-stock deal

Bengaluru: Hyperlocal logistics player Roadrunnr and food-ordering platform TinyOwl are merging in an all-stock deal, in a sign that consolidation is picking up in the consumer Internet space.

The combined entity will build out a consumer-facing product called “Runnr”, initially taking on food-delivery players Swiggy and Zomato Order head on, multiple people directly involved in the deal told ET.

The transaction will be the first major consolidation in the hyper-local delivery space, which emerged as the favourite segment for entrepreneurs and investors last year. As part of the deal, Roadrunnr has on boarded the technology, data analytics, sales, support and the management team at TinyOwl along with the brand name. In the short term, TinyOwl will continue to operate its app in localities where order volumes are high, and phase out eventually to the new brand identity “Runnr,” a top executive told ET.

However, the joint entity will launch its consumer-facing food-delivery platform “Runnr” in the next three weeks in Mumbai. Roadrunnr CEO Mohit Kumar declined to comment on the deal.

The final contours of the deal are still being finalised and are likely to be sealed over the next one week. In March, ET was the first to report that the two startups were in talks to merge and create an integrated hyperlocal delivery service.

Both RoadRunrir and TinyOwl count Sequoia Capital India and Nexus Venture Partners as common investors.

Bengaluru-based Roadrunnr, owned by Carthero Technologies, founded by former Flipkart executives Mohit Kumar and Arpit Dave, also counts Blume Ventures as an investor while TinyOwl, founded by IIT-Bombay graduates counts Matrix Partners India as an additional investor.

Both startups combined have-raised over $50 million or Rs. 330 crore in funding over the past 24 months.

“Roadrunnr will leverage its logistics capabilities, and Tinyowl’s consumer experience and technology to differentiate and scale ourselves more efficiently than competitors,” said a senior executive. After this deal, two major players remain in the food-delivery business-to-business space — Opinio and Shadowfax.

Two other venture-funded players in the space — Pickingo and Townrush — have already shut shop. Both Opinio and Shadowfax primarily get revenue by delivering for small businesses including restaurants, grocers and pharmacists. Opinio, which raised $8.3 million from Sands Capital, Accel Partners and Delhivery, focusses on both partnerships such as Pizza Hut, KFC, Ammi’s Biryani etc and 4,000 long-tail merchants to scale.

Shadowfax, which raised $8.5 million from Eight Road Ventures, primarily focusses on tie-ups with established brands including McDonald’s, Domino’s and Big-Basket to fulfill their deliveries. The company also does other ecommerce deliveries.

According to a report by Morgan Stanley, online penetration in food and groceries is expected to increase from 3-5% in 2014 to 25-30% in 2020. But while the opportunity in the space remains large, startups have been grappling with scale and hyper-competition, as they continue to lose money on every transaction, leading to some players shutting down and while some change their business model.

But globally, the space continues to attract capital, especially in China where companies like Meituan-Dianping raised $3.3 billion followed in April by Ele.me mopping up $1.25 billion from Alibaba Group Holding and its internet finance arm Ant Financial.

Source: Economic Times
(Photo: yourstory.com)

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