Food tech start-up Dazo shuts down

Bengaluru: Food tech start-up Dazo has decided to shut shop barely a year after it started operations, signalling the end of a bull run for food tech businesses. The company, which was initially called Tapcibo, used to aggregate meals from partner restaurants and took care of last-mile delivery.

The company, floated by Shashaank Shekhar Singhal and Monica Rastogi in October last year, counted among investors Amazon India chief Amit Agarwal, Google India chief Rajan Anandan, Commonfloor’s Sumit Jain, TaxiForSure’s Aprameya Radhakrishna and Alok Goel, the former Freecharge chief executive who recently joined venture capital firm SAIF Partners after Freecharge was bought by Snapdeal.

The company rebranded itself as Dazo and raised an undisclosed amount from these industry executives.

Chief executive Singhal said in a statement that the team has decided to work on a different project.

“As a team, we’ve decided to move over this business and we’ll be working on a new product. I hope we were able to serve you well,” said Singhal.

The company had initially started out as an Internet-first kitchen and subsequently pivoted to an aggregator of select restaurants.

Food technology start-ups have attracted ample investor interest of late. According to Tracxn, a company which provides data on start-ups, about ₹ 467 crore has been invested in the sector in 2015, with Zomato alone accounting for ₹ 320 crore.

However, the sector has hit a roadblock of late, with investors tightening their purses as the companies continued to burn cash to acquire customers without creating a product differentiation.

For instance, Dazo was competing with companies such as Swiggy, Tinyowl and Zomato, aggregators which have way more restaurants and hence service more orders.

Besides, Internet-first kitchen SpoonJoy is scaling down its operations in Bengaluru and stopped operations in Delhi, The Economic Times newspaper reported last week.