TinyOwl Lands $16M To Expand Its Food Delivery Service To 50 Cities In India

India-based food ordering service TinyOwl has raised a $16 million Series B round to fund an aggressive plan to reach 50 cities in the country, TechCrunch has learned.

TinyOwl co-founder and CEO Harshvardhan Mandad disclosed details in an email to staff earlier this month. The company initially denied the round, but has since confirmed it to TechCrunch. The capital was provided by Matrix Partners and existing investors Sequoia Capital and Nexus Venture Partners.

TinyOwl raised $1 million in August 2014. It added a $3 million Series A round in December.

It’s been public knowledge that TinyOwl was raising fresh funding. Last month, Mandad told VC Circle that he was in discussions over a $5 million raise. Perhaps spurred by increased competition, TinyOwl has taken on a lot more capital and raised its targets — VC Circle reported plans to expand to four new cities in the next six months — accordingly.

TinyOwl’s service allows customers to order take-out via its iOS and Android apps. It launched in March 2014 and is currently available in Mumbai only, however Mandad explained in the email that the aim is to take the service to over 50 cities in India before the end of the year. Another target, he wrote, is to pass 50,000 daily orders per day before the end of the year — that would be a big jump on its current daily order rate of 3,000-5,000.

The young startup has witnessed the competition intensify lately. Rocket Internet-backed Food Panda entered India via the acquisition of TastyKhana last year, and this month it snapped domestic rival Just East as part of a glut of global acquisitions. In addition, food discovery service Zomato — which has global reach and raised over $110 million from investors — will launch a food order service in India next month, and has allocated $50 million to build the business.

“I am not afraid [of competition] and you should not be, we have to focus on building a great product which gives best customer experience and parallel expand to other geographies at lightning speed,” Mandad wrote in the company-wide memo.

Indeed, increased competition is “good for the system”, he wrote, since it raises the visibility of food ordering services among consumers, which can only benefit TinyOwl.

Mandad also told VC Circle that TinyOwl would begin charging restaurants 10-20 percent commission per order this year. The service does not currently make money.

India’s food ordering space is just one market booming in response to the growth of smartphones and mobile internet access in the county. An IDC report found India the fastest growing smartphone market in Asia — over 23 million smartphones were shipped in Q3 2014, according to the firm, which represented an 82 percent growth on one year previously. Shipments did decline during the most recent quarter, however, according to IDC, due to a surplus of inventory left over after India’s festive season in October and November.