Zomato acquires logistics startup Runnr in an all-stock deal

Zomato, the online restaurant discovery and food delivery startup, has acquired hyperlocal logistics startup Runnr in an all-stock deal. The acquisition values the delivery startup at $40 million. It is part of the food tech company’s strategy to strengthen its delivery service that faces stiff competition from Naspers-backed Swiggy. Apart from Zomato, UberEATS was also in the race to acquire Runnr. Zomato currently clocks over 3 million orders monthly with Runnr fulfilling about 3,00,000 orders for Zomato monthly, which forms ~10% of its total delivery volumes.

Deepinder Goyal, CEO of Zomato, said that “We have always maintained that the most cost-efficient delivery fleet is the restaurant’s own, where they can utilize the same staff during off-peak hours for back-of-house and marketing activities. That belief is still intact”. Currently, ~92% of orders delivered through the Zomato platform are fulfilled by third-party logistics players as also restaurant partners with the remaining 7-8% being self-fulfilled. However, through this deal, about 50% of the orders will be self-fulfilled by Zomato over the next few months. Mohit Kumar, CEO of Runnr, explained that “About 95% of our orders come from the food delivery sector with the remaining from pharma, e-commerce and grocery. Zomato forms about 85% of the food delivery orders we fulfil currently”.