Grofers is making these
acquisitions primarily for the teams with no significant cash or equity
being exchanged, an executive from the Gurgaon-based company said, while
confirming the news.
Spoonjoy, which specialized in serving healthy meals, was backed by SAIF Partners as well as angels like Flipkart's Sachin Bansal, and raised $1 million, while Townrush was seed-funded by Lightspeed Venture Partners. Both these businesses will be discontinued going forward. Backed by Tiger Global, Sequoia Capital, and Yuri Milner's personal investment vehicle, Grofers has been raising funds at a staggering pace. It has already raised two rounds of financing this year, and is close to announcing a $120-million round led by SoftBank Corp. With an enviable war chest, players like Grofers have been snagging younger startups for their people talent. Over the past year, e-commerce majors Flipkart and Snapdeal have made a string of acqui-hires, where the aim of the acquisition is to tap into the team without shelling out much capital for the buyout.
Albinder Dhindsa, co-founder & CEO of Grofers, told TOI that the primary reason for these acquisitions was to hire the teams. "While at Spoonjoy, we were able to on-board the team entirely, we got to look at Townrush and pick some of the talent there. We are not looking to get into the space each of these companies were in. However, their experience in building and running early-stage tech companies allows us to get hold of a large talent pool in one go," he said. Co-founded by ex-Flipkart employees Saurya Prakash and Tushar Bisht earlier this year, Townrush catered to on-demand needs of merchants and small businesses for local deliveries within the city.
As for Spoonjoy and a clutch of food-delivery startups which received initial money by investors this year, it's been tough going over the past few months. Others like Dazo, another Bangalore-based food tech startup, also shuttered operations recently - a reversal for the sector which attracted heaps of investors in the beginning of the year. Players big and small are having a relook at costs involved in food delivery with even the likes of Zomato and Tiny Owl slashing jobs and downsizing operations.
Similarly, hyperlocal delivery saw a huge amount of ventures spring up this year but many have found it difficult to raise follow-on capital. The unit economics in the delivery business is a big challenge, Dhindsa admitted. "Since these (Spoonjoy and Townrush) are acqui-hires, we are not looking at continuing any of the existing business lines of these companies," he said. In 2015, as many as 290 startups received seed funding, up almost 90% from last year, but follow-on rounds have been muted despite the glut in initial rounds. Anand Lunia, founding partner, India Quotient, an early-stage fund, said with high level of tech demand, companies need very specific expertise or ready technology which is what is being bought.
Spoonjoy, which specialized in serving healthy meals, was backed by SAIF Partners as well as angels like Flipkart's Sachin Bansal, and raised $1 million, while Townrush was seed-funded by Lightspeed Venture Partners. Both these businesses will be discontinued going forward. Backed by Tiger Global, Sequoia Capital, and Yuri Milner's personal investment vehicle, Grofers has been raising funds at a staggering pace. It has already raised two rounds of financing this year, and is close to announcing a $120-million round led by SoftBank Corp. With an enviable war chest, players like Grofers have been snagging younger startups for their people talent. Over the past year, e-commerce majors Flipkart and Snapdeal have made a string of acqui-hires, where the aim of the acquisition is to tap into the team without shelling out much capital for the buyout.
Albinder Dhindsa, co-founder & CEO of Grofers, told TOI that the primary reason for these acquisitions was to hire the teams. "While at Spoonjoy, we were able to on-board the team entirely, we got to look at Townrush and pick some of the talent there. We are not looking to get into the space each of these companies were in. However, their experience in building and running early-stage tech companies allows us to get hold of a large talent pool in one go," he said. Co-founded by ex-Flipkart employees Saurya Prakash and Tushar Bisht earlier this year, Townrush catered to on-demand needs of merchants and small businesses for local deliveries within the city.
As for Spoonjoy and a clutch of food-delivery startups which received initial money by investors this year, it's been tough going over the past few months. Others like Dazo, another Bangalore-based food tech startup, also shuttered operations recently - a reversal for the sector which attracted heaps of investors in the beginning of the year. Players big and small are having a relook at costs involved in food delivery with even the likes of Zomato and Tiny Owl slashing jobs and downsizing operations.
Similarly, hyperlocal delivery saw a huge amount of ventures spring up this year but many have found it difficult to raise follow-on capital. The unit economics in the delivery business is a big challenge, Dhindsa admitted. "Since these (Spoonjoy and Townrush) are acqui-hires, we are not looking at continuing any of the existing business lines of these companies," he said. In 2015, as many as 290 startups received seed funding, up almost 90% from last year, but follow-on rounds have been muted despite the glut in initial rounds. Anand Lunia, founding partner, India Quotient, an early-stage fund, said with high level of tech demand, companies need very specific expertise or ready technology which is what is being bought.
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