Gurgaon headquartered restaurant search & discovery platform Zomato has finally acquired Sequoia Capital backed hyperlocal delivery startup Runnr in an attempt to strengthen its delivery business that faces stiff competition from Naspers-backed Swiggy.
The acquisition has been rumored since May and is much-anticipated, as Zomato CEO Deepinder Goyal himself made the announcement in a company’s official blog post. The acquisition is a all-stock deal, which was previously pegged at $40 million by various media outlets, however Zomato didn’t disclosed the deal amount.
In total Runnr is Zomato’s tenth acquisition globally.
Post acquisition, Runnr will continue to operate as a separate entity and serve other companies, said Deepinder Goyal in the blog post.
Deepinder further said that Runnr handles 300,000 deliveries per month, which he claimed is just 10 percent of Zomato’s own delivery business. The plan is to scale the Runnr business to handle all of Zomato’s deliveries in India, and later expand to the UAE.
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Founded in 2015 by former Ola executive Mohit Kumar, along with Arpit Dave, Vatsal Singhal, Aravind Reddy, Gnanesh Chillukuri and Mukunda NS, Runnr essentially handled last mile delivery for businesses. The company had raised $20-25 million from the likes of Sequoia Capital, Nexus Venture Partners and Blume Ventures.
In June last year, Runnr had acquired TinyOwl and eventually re-branded itself from ‘RoadRunnr’ to ‘Runnr’.
“Emotionally, the deal has been in place for a couple of months now, and both the teams have been working closely with each other quite some time now. So much so, Mohit Kumar, founder and chief executive at Runnr, has been living in New Delhi (moving from Bengaluru) for about two months already,” Deepinder Goyal wrote in the blog post.
Post this acquisition, Indian food delivery market is now becoming a three-horse race between Zomato, Swiggy and UberEATS.
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