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UberEATS, Zomato in race to acquire delivery startup Runnr

15 May, 2017

UberEATS, the food delivery service that cab-hailing firm Uber launched in India earlier this month, and restaurant-listings firm Zomato are in talks with last-mile delivery startup Runnr for a potential acquisition, media reports said citing people familiar with the development.

Both companies have given a term sheet to Runnr, a report in The Times of India said. While UberEATS has pegged the company’s valuation at $50 million, Zomato is offering $20-30 million in an all-stock deal, the report added.

The report also mentioned that Carthero Technologies Pvt. Ltd, which operates Runnr, is looking to raise $6-10 million in fresh investment. VCCircle reported last month that the company had mandated GCA Savvian Corporation, an investment bank based in Japan and the US, to raise $10 million in its next round.

Email queries sent by VCCircle to Zomato, Runnr and UberEATS remained unanswered at the time of writing this report.

The sale is likely to be an acqui-hire as it will give Zomato or UberEATS a ready pool of employees to scale their food delivery business, another report in The Economic Times said.

Runnr was formed after on-demand logistics startup Roadrunnr acquired troubled food-ordering startup TinyOwl in a share-swap transaction in June 2016, a deal orchestrated by the common investors of the two startups. Roadrunnr then pivoted to food delivery, focusing largely on the consumer side.

Founded in 2015 by former Flipkart employees Mohit Kumar and Arpit Dave, Roadrunnr started off as a provider of hyperlocal logistics services to merchants, restaurants and e-commerce companies, enabling them to deliver orders by connecting with a local delivery fleet. In July 2015, it raised $11 million in Series A funding from Sequoia Capital, Nexus Venture Partners, Blume Ventures and others.

Following the acquisition, Runnr secured $7 million from existing investors. Sequoia Capital did not take part in this round.

Uber launched its on-demand food delivery app UberEATS in Mumbai earlier this month.

Zomato has been able to reduce its cash burn and grow revenue rapidly while showing remarkable growth in its newly launched food ordering business. Revenue from the vertical jumped eight-fold from the previous year to around $9 million in FY2016-17.

Other prominent players in the online food delivery segment are Foodpanda and Swiggy.

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UberEATS, Zomato in race to acquire delivery startup Runnr

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