On-demand hyperlocal delivery startup, Shadowfax has acqui-hired its peer, Pickingo for an undisclosed amount. The news came in just a couple of months after Zomato backed out from investing in the startup.
With this cash and stock deal, Shadowfax has brought about 45 employees from Pickingo’s management team and a few hundred delivery boys. “Pickingo is one of the best teams in the industry and an immediate cultural and operational fit for us,” said Abhishek Bansal, CEO at Shadowfax.
In August, Pickingo had raised $1.3 million in its first round of institutional funding, led by Rehan Yar Khan-backed Orios Venture Partners and Toppr Co-founder Zishaan Hayath. The company used to facilitate last-mile logistics services for companies such as Jabong, Snapdeal, Paytm and ShopClues, as well as individual merchants. But suddenly, the game turned sour for the startup. Pickingo went through a series of setbacks in the recent past. First, when its funding deal went futile with SAIF capital, followed by Zomato’s last minute withdrawal from investing in the company. Forced by the odds, the startup had to shut down its operations.
Shadowfax, which is backed by Fidelity Investments and seeded by Snapdeal founders and Powai Lake Ventures, is present in Delhi-NCR and Mumbai. In September, the company had raised $8.5 million in Series A round by Fidelity’s proprietary investment arm, Eight Roads Ventures. The startup basically focuses on food delivery, but it is also foraying into eCommerce and reverse logistics.
The unfortunate fate of Pickingo is reflective of the common crisis hyperlocal startups have been facing in the recent times, that is, figuring out a way to scale. Although the space has witnessed a surge of startups emerging in various verticals, only a few could actually manage to survive. Most of them have either shut down their operations or have been acquired by bigger players, owing to their failure of raising fresh capital to propel their businesses. Less than a couple of weeks ago, B2B logistics startup Townrush and food delivery app SpoonJoy got acquired by Grofers, after going through the same circumstances as Pickingo.
Hyperlocal is undeniably considered as a lucrative space. However, currently the ground has become overpopulated with players trying aggressively to disrupt every nook and cranny of the market, resulting in a situation that demands the boundaries of innovation to be pushed further. Now it will be interesting to see what twist the existing startups bring to this game.