Berlin-based Rocket Internet seems to have faced its first setback in India’s online food ordering market. The company, which recently infused $110 millions in Foodpanda in India, is learnt to have made a bid to acquire the Sequoia-backed TinyOwl, albeit without success.
On condition of anonymity, a senior TinyOwl executive said Rocket had spoken to the company for a possible buyout, but the Mumbai-based company, plans to expand across India this year, did not want to lose control to Rocket. “There are, of course, a lot of synergies between TinyOwl and Rocket’s model in India for the online food ordering market. But TinyOwl has raised fresh funds and, at this moment, isn’t ready for a sell-out and losing control.”
When contacted, a Rocket Internet spokesperson said, “We don’t comment on such rumours.”
Rocket Internet aims to be the largest player in India’s online food ordering market. A recent report by the German company said India was one of its biggest priority markets in Asia.
TinyOwl covers about 4,000 restaurants in Mumbai, with about 2,000 orders a day. For the company, the average customer acquisition cost is about Rs 100 and the average ticket size of an order on its app is Rs 300-400.
Less than a year old, the Harshvardhan Mandad-led TinyOwl has raised Rs 100 crore in a second round of funding. It aims to expand to 50 cities by the year-end and hit the top 10 cities by the middle of this year. The company gets 10-20 per cent commission from restaurants when an order is placed through its app. On a similar model, the Deepinder Goyal-led Zomato is expected to launch a food ordering facility next week. Zomato will, like TinyOwl, get a share of the value of the orders through its app.
Sequoia is a common investor in both Zomato and TinyOwl. TinyOwl, so far specialising in food ordering, plans to expand to reviews, too.
Rocket Internet had incubated Foodpanda.com in Berlin in May 2012, as a global online food ordering marketplace. It operates across 40 countries and five continents, in partnership with 30,000 restaurants globally.
Its Indian entity, Foodpanda.in, was started in May 2012. Major investments by Rocket in the Indian start-up system include Jabong, Printvenue, FabFurnish and OfficeYes.