Online food discovery and ordering platform Zomato has made a strategic investment in hyperlocal delivery companies Pickingo and Grab in order to provide last mile delivery for restaurants which are dine-in only and those who do not offer delivery, along with other restaurants.
Pickingo will use the funds to scale with Zomato’s Order, the food ordering and delivery app, and strengthen its relationships with restaurants through it. Grab, previously known as Grab a Grub, has rolled out its services with Zomato in Mumbai and plans to extend it to other cities in the next couple of weeks.
Zomato has also partnered with e-commerce logistics services provider Delhivery, which would help simplify operations for restaurants and enrich customer experience. Zomato said that it will launch its online ordering service in Dubai, Australia and South Africa this month and is in talks with hyperlocal logistics firms in other countries for its delivery venture.
Through its last mile delivery services, Zomato now has a significant advantage over competitors like FoodPanda, TinyOwl, SpoonJoy and TastyKhana among others. For now, it appears that the restaurant does not need to have a tie up with Zomato to have its food delivered in the city. In April, we’d reported that after Zomato launched its ordering service, it did not confirm the order itself but had given its partner restaurants iPads with the Zomato app built in. This acted as Zomato’s direct line with restaurants which needed order confirmation. However, with the new partnerships in place, Zomato itself will become a ‘user’ for restaurants which do not offer home delivery, not only boosting their sales, but also giving them the benefit of not having to invest in delivery systems. Zomato already has a ginormous database of restaurants and it will be able to deliver practically from any restaurant on its platform, as long as the platform can pack its food. Deepinder Goyal’s tweet implies something on these lines:
Coming soon on @Zomato Order: the entire Indian restaurant industry, including dine-in-only restaurants that don’t otherwise deliver. [1/2]
— Deepinder Goyal (@deepigoyal) September 1, 2015
Info Edge considering reducing Zomato stake
Last month, we reported that Info Edge, which has majority shareholding in Zomato, may consider bringing its stake below 50% in the company in the next major round of funding. Answering a query from analysts, InfoEdge founder and vice chairman Sanjeev Bikhchandani said that the company was unlikely to invest in Zomato alone but may consider participation with other investors in its next round of funding. During the quarter, Info Edge invested Rs 152 crore in Zomato to maintain its stake at 50.1%.
Zomato had reported an EBIDTA loss of Rs 136 crore for the 12 month period ended 31st March 2015 (FY15), compared to the Rs 41.39 crore loss reported in FY14. It had generated total operating revenue of Rs 96.7 crore in FY15, more than three times the Rs 30.6 crore operating revenue generated in FY14.
In July, Zomato introduced online payments for ordering food in select restaurants in India. This allowed users to pay for orders through debit cards, credit cards and net banking, for which Zomato had partnered with PayPal for. The company, which has raised $163 million in funding so far, also introduced Zomato Credits where users would get referral points and refunds. In May, it launched a separate app called Zomato Order for its food ordering service on iOS and Android.
Pickingo’s funding and expansion plans
Last month, the Gurgaon-based Pickingo raised $1.3 million in funding from Rehan Yar Khan of Orios Venture Partners and participation from Zishaan Hayath. Founded in December last year, the platform claimed to have signed up more than 300 groceries, pharmacies and restaurants as of August. The company claims it will expand its services to more than 20 cities before the year end. Pickingo claims to have over 700 field executives across 6 cities in India.
Grab offers delivery within minutes
Grab is a B2B hyperlocal logistics service which lets merchants deliver products ‘within minutes’ and claims to have clients in restaurants, groceries, laundry services, pharmacies, & e-commerce deliveries. The company says that it has delivered over 800,000 orders across 7 cities in the last 2 years; and has 1,000 riders from over 440 merchants. Grab has raised $1 million so far.
Our Zomato coverage here.