“Most startups that operate in the food ordering space don’t make revenues,” says TinyOwl’s Harshvardhan Mandad on the company’s dismal yearly earnings
Bengaluru | Red Newswire | Source: BI. By Poulomi Das | NOV 19 2015 03:00 AM IST.
The past few weeks have been taxing for the players of the Indian food-tech space and for Mumbai-based food ordering and delivery app Tinyowl, things are looking even worse.
According to data by Tofler, which tracks companies and their performances first published on Nextbigwhat, TinyOwl’s reported revenue (not including sales or profit) for the past financial year (2014-2015) has been a mere Rs 24,000 while its expenses during the same period stood at a whopping Rs 25.5 crores. This means that the company closed its financial year with a loss of about Rs 25 crores, the majority of which was categorized under employee expense worth Rs 12 crores.
TinyOwl’s total revenue however stands at Rs 44 crores, the source for which is touted as the interest received on VC funds kept as fixed deposits by the company.
We reached out to TinyOwl for a comment on the above information and while they explicity refused to comment on the financial fate of the company, this is what CEO Harshvardhan Mandad had to say, “TinyOwl has seen remarkable growth in the first year of operations and has been one of the front runners in the segment so far. It is also noteworthy that most startups which operate in the food ordering space usually don’t make revenues at the start of operations. This is a very well-known industry norm.”
While experts have expressed shock at the meager revenue of the company, which is in thousands and not lakhs or crores, there is also an arising curiosity behind the source of the company making a revenue of Rs 24,000 considering co-founder Harshvardhan Mandad has on more than one occasion revealed that TinyOwl charges no amount to all the restaurants for its services, despite the restaurants getting more orders and tools for managing their business.
In a YourStory article dated February 2015, Mandad went on record to state the same and admit that the company was focusing on growth rather than making profits.
Our queries regarding the same were not entertained by the TinyOwl team.
Tiny Owl was founded in June 2014 by five IIT graduates- Harshvardhan Mandad, Gaurav Chowdhury, Saurav Goyal, Tanuj Khandelwal, Saurav Goyal and Shikhar Paliwal and is owned by TinyOwl Technology Private Limited.
Things started going downhill for the company in September when they fired about 200 employees. Then, in November, a fresh round of lay-offs began when the startup let go another 112 of its employees across Delhi, Hyderabad, Chennai and Pune. Pune was the most affected by these staff cuts since the company also shut down the operations in the city. The reason given for these lay-offs were the usual- restructuring aimed at reducing expenses.
However, the situation soon turned ugly when Gaurav Chowdhury, one of the four co-founders of TinyOwl was reportedly taken hostage by the employees who demanded their settlements. As of November 9, it was known that the Pune ex-employees were indeed paid their dues, while the others are still waiting.