Zomato-Chile

Zomato has acquired Sparse labs, a two and half year old bootstrapped logistics-tech company founded by Pankaj Batra, to address an area where it has “immense room for improvement” – the tracking of delivery. Incidentally, Batra once worked as the Technical Architect at StudyPlaces, a company which Zomato backer Info Edge had also funded.

Sparse Labs has a lightweight Android application which helps restaurants track and optimise their in-house delivery fleet, by transmitting a delivery-persons location to both the restaurant and the user in real-time, as well as giving the delivery-person route information. The app will be renamed Zomato Trace. (hmm… trace-route?)

This acquisition may help Zomato and its logistics partners, but is likely to fit with their B2B business as well. However, Zomato will be offering Trace to restaurants for free, “very soon”. According to Zomato “the system also allocates orders to riders based on their proximity to the restaurant, and uses machine learning to identify a rider’s familiarity with a neighbourhood to further optimise delivery efficiency. Restaurants also have the option of using a proprietary GPS tracker developed by Sparse, that can be fitted onto bikes.”

According to its website, Sparse Labs works with Bueno Kitchen, Chop Chop, Cook Gourmet, Food Port, Pick my laundry, Quilvery, The Spice Lab, Whomely, Waiters on Wheels, Zaza Box.

MediaNama’s Take

This helps only if it improves delivery time. As a customer the way I see it, I care for a few key things: that the food is delivered to me in time (and is preferably hot), that it’s packaged in a manner that it doesn’t spill, the food tastes great, and that the delivery guy doesn’t call every 3.5 minutes asking for directions. Three of these things depend on the delivery of the service, and anyone who can solve this problem will be the preferred provider in the market. It’s like telecom and network quality: the cheapest service won’t find many takers if the network isn’t good enough.

In any case, Zomato prefers to have restaurants deliver. Take Rate for Zomato when restaurants deliver, the last time the company spoke about it, in May this year, was 8.2% (and 6-7% for larger chains and Quick Service Restaurants). They also make Rs 20 as contribution margin when restaurants deliver, and lose Rs 2 when their logistics partners deliver. The average delivery time (for when restaurants deliver, which was 80% of orders) mentioned then was around 38 minutes, a couple of minutes more when logistics partners delivered.

More from that very long discussion here.

Disclosure: Info Edge is an advertiser with MediaNama