Mumbai-based on-demand delivery startup Scootsy has raised $3.6 million (Rs 23 crore) in a bridge round of investment from Bangalore-based Agnus Capital, the family office of the promoters of pharmaceutical firm Strides Group, and Singapore-based investment firm Khattar Holdings, a company statement said.
The startup will use the new capital to strengthen its logistics, technology and delivery platform. It will also use the funds to launch Scootsy Express, a service that will deliver food to corporate offices across the city and Scootsy Pop-Up, a kitchen and distribution platform that will be available to brands across the country.
Horizontal players such as Amazon also have presence in the hyperlocal delivery space with Amazon Now.
Another startup in this space is Bangalore-based ZN Retail Pvt Ltd, which runs online grocery property ZopNow, which in 2015 raised $10 million (Rs 62 crore) from San Francisco-based Dragoneer Investment Group with participation from existing investors Accel Partners, Qualcomm Ventures and Times Internet.
The hyperlocal delivery segment has seen a number of casualties as investors have turned cautious due to a lack of a sustainable business model in the space.
In March this year, Chennai-based hyperlocal delivery startup Genie Solutions Pvt. Ltd shut its operations after it failed to raise funds.
Over the past year-and-a-half several other startups in the segment, including well-funded ventures like PepperTap and LocalBanya have also shut shop.
Food delivery firm Swiggy has acquired Mumbai-based on-demand delivery firm Scootsy in what is being seen as a distress sale.
The deal is valued at about Rs 50 crore (under $8 million) which is expected to close all in cash and retention of Scootsy’s brand name in Mumbai, said three people aware of the developments.
Scootsy’s founding team may be joining Swiggy’s management, said one of the persons. ET could not however independently verify this. The acquisition was first reported by Moneycontrol.com.
Founded in 2015 as an on-demand delivery platform in Mumbai, Scootsy has so far raised about Rs 25 crore so far from Agnus Capital and Khattar Holdings.
While the firm aggregates premium dining options catering to a niche, premium, high ticket size food delivery play in the city, about 25-30% of its business comes from non-food hyperlocal delivery operations including daily essentials, flower and gifting.
Heavy capital flow in the food delivery segment amongst the top national players rendered Scootsy helpless in its attempts to raise capital over the past year.
A large part of the cash component of the deal will be used to pay salaries of Scootsy’s employees who haven’t been paid for over 3 months, according to one of the persons cited above. Swiggy and Scootsy did not immediately respond to ET’s email queries.
“The funding crunch has almost crippled Scootsy. The strength of riders has reduced impacting deliveries and the lack of capital has hit the business hard,” said a person directly aware of the development.
Scootsy currently has under 700 delivery agents in Mumbai across its food and non-food delivery operations delivering around 2000 orders per day. The firm has a strong hold in South Mumbai, Lower Parel and some parts of Bandra where several premium dining restaurants are located.
Swiggy delivers about 5,00,000 orders per day and has a fleet size of 55,000 all over the country.
Swiggy, which has been targeting hyperlocal market, the deal adds value through Scootsy’s premium customer base, which it is looking to tap into for other delivery categories as well.
RI Bureau
Burger King, the second largest burger chain globally, has partnered with hyperlocal company Scootsy for its home delivery service in Mumbai.
According to the release, the delivery will be made in 30 minutes from the chain's Lower Parel and Churchgate outlets in Mumbai.
"Online-apps and mobile penetration have changed the way business is being done worldwide. This strategic tie-up has opened avenues for faster growth,” shared Raj Varman, CEO, Burger King India.
At present, Burger King is running 30 stores across Mumbai, Delhi-NCR, Bengaluru, Pune, Chandigarh, Ludhiana and Jalandhar.
“The brand has become stronger, better understood and more vibrant, thus increasing our brand's connect with discerning customers across the city and making available our gastronomic delights for their consumption,” added Varman.
Sandeep Das, CEO of Scootsy said, "We are happy that now our customers can consume the delights offered by Burger King in the comfort of their homes or offices. Customers will be able to avail themselves of this service through Scootsy's ordering app which includes some of Burger King's signature dishes such as Whopper, Paneer King Melt, Xtra Long Mexican Veg and Chicken Chilli Cheezos.
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