Deepinder Goyal puts speculation to rest, confirms Runnr acquisition
Putting speculation to rest, Gurgaon-based foodtech startup Zomato today announced the acquisition of Runnr, a Bengaluru-based delivery startup.
Deepinder Goyal, Co-founder and CEO Zomato, said in a blog - Yes, that’s right, we just signed our long-rumoured acquisition of Runnr.
While the financial details of the deal were not disclosed, the blog iterated Zomato and Runnr would look to build an end-to-end listings, discovery, reviews, ordering and logistics food platform.
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 logistics entity.
Deepinder went on to add that emotionally, the deal has been in place for a couple of months, and both teams had been working closely.
Runnr currently fulfills 3 lakh orders a month, which Deepinder claims is less than 10 percent of the food ordering volume of Zomato.
Interestingly, Zomato invested an undisclosed amount in Mumbai-based food delivery platform Grab in September 2015, when its delivery business was at a nascent stage.
The year 2016 was tough for the foodtech startup space as investments fell. The period from January to April 2015 saw over $74 million pumped into the space. In comparison, January-September 2016 saw the number falling to $19 million.
The year also say TinyOwl, touted to be Swiggy’s biggest rival, see a downfall. Runnr itself, which had started with great promise in 2015, faced several issues as business models and unit economics were questioned.
By 2016-end, Runnr went through a stealth mode, and acquired TinyOwl. However, it struggled to raise fresh funding and had to shut operations in different locations. It even faced legal action over its initial name ‘Roadrunnr’, which it had to change to Runnr.
The food delivery space found heavyweights in two players – Zomato and Swiggy. This year, the food market has been more about these players and new entrant uberEATS. There was also some speculation that uberEATS was in talks to acquire Runnr.
Swiggy has a strong footprint across eight cities, and as of 2016, had over a million app downloads and claimed to have 25 percent month-on-month growth. Swiggy raised fresh funds from Naspers earlier this year.