Runnr, a food ordering and delivery platform, is earning annualised profits of R1.15 crore, according to company CEO and co-founder Mohit Kumar.
The company, which started operations in June, had acquired the customer base of TinyOwl, which closed down the last of its operations in May. It competes with players such as Swiggy, Zomato and Foodpanda in two cities Bengaluru and Mumbai.
Kumar told FE that the company earns a commission of around 18% per order from its restaurant partners. According to Zomato CEO Deepinder Goyal, his firm makes a commission of 10% on every order while Foodpanda CEO Saurabh Kochhar said the Indian business of Foodpanda earns commissions of anywhere between 10% and 15% per order.
“As a part of our strategy, we have decided that we will stick to those restaurants that offer higher commissions. We work with a limited number of merchants to improve their volumes,” said Kumar.
He added that the firm will reduce the number of restaurants on its platform from 4,000 currently to 2,000. The company is spending Rs 65 on every order, Kumar explained where Rs 58 is spent on delivery and Rs 7 is the support cost. Unlike Zomato and Foodpanda, Runnr charges customers a flat delivery fee of Rs 30 on every order as a result of which, it services 2,000 order a day well behind Zomato’s 48,000 orders and Foodpanda’s 70,000.
Kumar said the company is expected to achieve daily orders of 40,000 by end of March 2017.
The company has tied up with about 45 offices in Bengaluru to capture customers ordering every day from restaurants aggregators such as Swiggy, Foodpanda and Zomato. “We are targeting customers in Rs 140 category and 80% of the people are ordering food from our platform daily,” said Kumar.
“The current average ticket size is Rs 185 but we are aiming for Rs 140 because with this we will be able to target more customers,” he added. Runnr will shortly raise delivery charges from Rs 30 to Rs 40-45 and the commission from 18% to 20-22%.
Kumar said, “This would increase the profit from Rs 16 per order to Rs 25 per order over the next six months.”
The company also plans to offer services in Gurgaon soon.