Zomato, an online restaurant discovery platform which has also started food delivery service, has announced that it has closed the acquisition of logistics startup Runnr. The deal seems to be aimed at boosting its food delivery business.
The acquisition has been rumored since May and is much-anticipated. Along with Zomato, UberEATS was also reportedly in talks to acquire Runnr.
While the company has not revealed any financial details related to this all-stock deal, the deal was previously pegged at $40 million. However, we couldn’t verify is the deal was closed at that valuation.
Runnr Co-Founder and CEO Mohit Kumar, along with his team, will continue to run the business. Zomato’s blog also specified the 1500-strong Runnr workforce will join Zomato, but continue to operate as an independent entity.
In a blog post, Deepinder Goyal, founder and CEO of Zomato, said,
We’ve been adding to our Runnr team steadily over the past week; it is already 1,500 strong, and growing by the day…Yes, that’s right, we just signed our long-rumoured acquisition of 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, the founder and CEO of Runnr, has been living in Delhi (moving from Bangalore) for about two months already.
Zomato was founded in 2008 and has raised over $240 million from investors, including its most recent injection of $20 million from Sequoia earlier this year.
While the company was valued at over $1 billion in 2015, HSBC marked down its valuation by half last year, following measures to cut down cash-burn rate, including staff layoffs and service cutbacks. The startup is currently valued at around $800 million.
The deal is being looked as a lifeline to Runnr as the company has struggled to raise funds in the recent past. Runnr was a product of a merger between Roadrunnr and food-ordering start-up TinyOwl.
The acquisition is expected to bolster Zomato’s delivery capabilities and help the New Delhi-based start-up build a captive fleet of delivery personnel — just like its rival Swiggy.