TinyOwl raises $16M from Matrix, others to take on Foodpanda, Zomato in India

Location-based food ordering service TinyOwl has raised INR 1 billion (US$16 million) in series B funding from Matrix Partners and existing investors. Sequoia Capital and Nexus Venture Partners had invested US$3 million just two months back. Kunal Bahl and Rohit Bansal, co-founders of leading ecommerce site Snapdeal, are angel investors in TinyOwl.

“We plan to use the current funding for national level expansion and innovating on the products side to give a seamless experience to users,” says TinyOwl co-founder and CEO Harshvardhan Mandad in a statement.

The TinyOwl app currently works only in Mumbai. It detects a user’s location and delivers orders from nearby restaurants as well as home-made food from local chefs. More than 4,000 restaurants are on the platform. Now the plan is to rapidly expand to over 50 cities across India.

“We believe there will be significant value creation in online food ordering in India, and a mobile-only approach is the way to win in this space,” says Rishi Navani, co-founder and MD, Matrix India.

Hot space

Food startups have been hot in India this year. The leading delivery service, Rocket Internet-backed Foodpanda acquired local rivals TastyKhana and Just Eat to expand faster inorganically. Food discovery service Zomato, which went on a global expansion spree last year, has now turned its attention to diversifying into food delivery as well. This new service is launching in India next month.

Niche food startups, focusing on one neighborhood before expanding, have also been coming up fast. Two such examples are Yumist and TapCibo, which recently raised seed funding. Both deliver food from their own chefs rather than restaurants.

The rapid increase in smartphone usage is driving traction for these apps, which busy professionals in urban India find very useful. The diversity of tastes for food in India also increases the choice of offerings that can be made, and that too makes both niche apps and aggregated platforms attractive.

Indian fast food is also gaining ground. Faaso’s – which stands for ‘Fanatic Activism Against Sub-standard Occidental Shit’ – raised US$20 million from Lightbox and Sequoia Capital earlier this month.

See: TapCibo emerges from stealth with funds to feed hungry Bangaloreans