In India, Tiny Owl Founder Reportedly Detained for Two Days By Laid-Off Employees — and the Police
Well that was strange — and scary.
Several hours ago, one of six cofounders of Tiny Owl, a two-year-old, Mumbai, India-based food ordering software startup, was released after being held captive for two days by disgruntled former employees at the company’s office in Pune.
Tiny Owl had earlier this week announced $7.67 million in fresh funding from earlier backers Matrix Partners and Sequoia Capital. But the funding came with the understanding that Tiny Owl would follow through on a major restructuring to control its burn rate.
Part of those changes, reported the Economic Times, involved moving Tiny Owl’s order processing to a third party app. According to Media Nama, they also included plans to lay off 112 sales employees across India in a second massive round of layoffs. (In September, reportedly, the company had separately laid off 160 employees.)
As part of that restructuring plan, the company is shutting down its operations in four cities, including Pune. Which leads us what happened to company cofounder Gaurav Choudhary.
Choudhary had traveled to Pune earlier this week to oversee the office’s closure, while his fellow cofounders – all of whom are graduates of IIT Bombay — traveled to sites in Gurgaon, Chennai and Hyderabad to do the same.
But according to various media accounts, soon after Choudhary informed Tiny Owl’s Pune-based employees of the layoffs, he was asked to pay them immediately. When he said he couldn’t, they reportedly refused to let him leave the building to return to Mumbai.
The Economic Times says it was told by employees that they were holding Choudhary as a hostage over settlement issues. Their complaint: Tiny Owl was reportedly offering post-dated checks to them, which concerned them as previously laid-off employees had yet to receive the payment owed them. (We’ve reached out to several Tiny Owl cofounders, but they haven’t responded to our requests for comment.)
At some point, according to Media Nama, Choudhary phoned the local police, asking for security and saying he was fearful for his physical safety. Later accounts suggest that local police and politicians who arrived on the scene strongly encouraged him to stay in an effort to work out a solution with the employees who felt they were being short-changed.
Indeed, Media Nama, which was allowed on the premises for part of the time, reported that: “According to the calculations done by one of the politicians present, TinyOwl owed employees in Pune money to the tune of Rs 30 lakh.”
Afterward, police insisted that he stay the night in the office, after taking statements from him and numerous employees, some of whom apparently took Choudhary out for dinner before returning to the office.
Thankfully, the situation seems to be resolved. Tonight in Pune, Choudhary was able to start making his way back to Mumbai.
If there’s a lesson to be learned in what just happened, we don’t know what it is other than that crazy things happen no matter where you are.
TinyOwl’s most recent raise wasn’t its first. Back in February, we reported on its $16 million Series B round, also provided to it from Matrix and Sequoia, as well as Nexus Venture Partners.
The company, which competes in an increasingly competitive market for food-delivery services in India, had raised its first round — $1 million in seed funding — in August of last year. It raised $3 million more in Series A funding last December. Altogether, it has collected roughly $27 million from its backers to date.
As notes the Economic Times, Tiny Owl isn’t the only food tech startup to lay off employees recently. As we reported earlier this week, Zomato is also laying hundreds of employees.
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