Food discovery and ordering platform Zomato can now take on the competition with added teeth after gobbling up delivery company Runnr in an all-stock deal. Though both companies refrained from commenting on the size of the deal, market observers have pegged it at $35-40 million. “With the combination of Zomato and Runnr, we have everything in the stack of building a delightful food delivery service in India and UAE — listings, discovery, reviews, ordering, and now, logistics,” Zomato founder and CEO Deepinder Goyal said in a blog post confirming the deal. He added that the companies had been in talks for a couple of months.
Currently, Runnr serves 300,000 orders monthly while Zomato is clocking 3 million orders every month. Runnr will continue to operate as an independent entity run by CEO Mohit Kumar and the rest of the founding members. In addition to Zomato, Runnr will also cater to other business categories, such as pharma and grocery. “This will ensure that the delivery fleet capacity that we build operates on a positive unit economics level while serving the mega-peaks in the food delivery business,” Goyal said in the blog post.
Following the merger, Zomato could gain the much-needed push in delivery to fight competition from other food delivery start-ups, such as Naspers-backed Swiggy, Foodpanda and UberEats, which was launched in India earlier this year.
In FY17, Zomato reported an 80% jump in revenue to $49 million, or Rs 11.38 crore, and cash burn for the company fell 81% to $12 million from $64 million a year ago, Zomato COO Surobhi Das said in a blog post.
Zomato now has fleet of 1,500 people from Runnr joining its team for delivery services. Runnr as an entity was formed when logistics company Roadrunnr acquired food-ordering firm TinyOwl. Leading investors of Runnr include Sequoia Capital, Nexus Venture Partners and Blume Ventures.