Rebranding: What Does It Teach an Entrepreneur! Essay
An acquisition in any business ecosystem garners a lot of attention from media and industry folks. But what happens in the pre and post acquisition/merger phase is something only an entrepreneur and his team can elaborate!
One of the most high-profile mergers/deals this year has to be that between Roadrunnr and TinyOwl. Speculations were rife about the funding situation and operational challenges at both these startups and the foodtech sector was also marred by valuation markdowns and weak funding.
post its acquisition of TinyOwl, the company (Carthero Technologies Pvt Ltd), transitioned into a food ordering and delivery platform. In July this year, Runnr went live with its Food Delivery app. The customer facing app allows users to browse nearby restaurants and order the food of their choice & have it reach them in under 45 minutes. The service is available in Bangalore and Mumbai now.
The newly formed entity also raised a new round of funds existing investors Nexus Partners and Blume Ventures. However, Sequoia Capital did not participate in this round of funds.
Entrepreneur India spoke to Mohit Kumar, Co-founder & CEO at the newly formed Runnr, about what it takes to reshape an existing company under a new brand name and the challenges of having to let go of valuable employees at the organization.
“The first thing that happens when an acquisition happens is that both the teams have to work together. If the teams can work together, everything else can be figured out easily, one step at a time,” Mohit said.
“We pretty much were doing all the deliveries TinyOwl used to carry out six months before the deal, especially in Bangalore,” he said.
Establishing a new brand name
Mohit said that having a new name is definitely a challenge because for the first few months you won’t have a brand recall. One can still carry forward some of your old brand value, but you need to re-build 80 percent of it, he adds.
Talking about the good side of re-branding Mohit said, “When you are starting out with a clean slate, you are approaching the user with a fresh proposition. The perception has to be clear in the user’s mind.”
Letting people go!
Several media reports have speculated several job reductions at the combined entity. Without giving us any numbers, Mohit said that there layoffs have taken place and it was tough for a first time entrepreneur like him to tackle this situation. “It’s tough because when you have a lean team, it becomes really hard to justify an employee as to why are we letting him/her go. We justified it internally saying it’s good for the employee as well because he/she wouldn’t be able to see a strong role in the company in the future as well, it’s better to align him a new path. …Obviously some of these discussions were emotional. What we did on our part was to get these employees hired using our network or even recruitment agencies,” he said, adding that most of the employees were successful in getting a job within the 10-15 days.
Mohit said that post the deal, the company has emphasized on putting together a supremely efficient senior management team who can help the company scale effectively. Runnr has picked executives from Nxtradata, Uber, Facebook and others.
Learning while re-building Runnr
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On being asked about his learning from this experience, Mohit said that one of the most important things he understood from this phase was that as a leader, one must learn to communicate well internally. It is extremely important to keep everyone in the team aware about key company decisions and keep communication smooth within the organization, especially in a small team. The company is also working towards making the company asset light, putting together a business oriented sales structure and hire only based on the requirement.
With the strong promise of delivering quality food quickly, the Runnr has been scaling up quickly. Additionally, the startup will focus on solving office lunch problem through its curated meals section. Runnr is working on solving problems like Nutrition Information of food, Packaging for consumption at work place which have not been addressed by anyone in the industry so far.