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UberEATS, Zomato in race to acquire delivery startup Runnr

By Disha Sharma

  • 15 May 2017
UberEATS, Zomato in race to acquire delivery startup Runnr
Credit: Thinkstock

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.

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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.

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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.

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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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