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Laid-Off Employees Detain TinyOwl Founder

... TechCrunch:

Well that was strange — and scary.

Hours ago, one of five cofounders of TinyOwl, 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.

TinyOwl 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 TinyOwl would follow through on a major restructuring to control its burn rate.

Part of those changes, reported the Economic Times, involved moving TinyOwl’s order processing to a third party app. According to MediaNama, 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 100 employees.)

As part of that restructuring plan, the company is shutting down its operations in four cities, including Pune. Which leads us to 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 TinyOwl’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 and 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: TinyOwl was reportedly offering post-dated checks to them, which concerned them as previously laid-off employees had yet to receive their payment. (We’ve reached out to several TinyOwl cofounders, but they haven’t responded to our requests for comment.)

At some point, according to MediaNama, 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, MediaNama, 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 Choudhary stay the night in the office, after taking statements from him and numerous employees. Some of them then reportedly took Choudhary out for dinner — nice captors to have! — 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.

TinyOwl isn’t the only food tech startup to lay off employees recently. As we reported earlier this week, Zomato, headquartered in Gurgaon, is also laying hundreds of employees. And early last month, the Bangalore-based food-tech startup Dazo decided to shut down its operations, citing its inability to raise more funding

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