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Zomato acquires logistics startup Runnr to strengthen its food delivery

To strengthen its logistics services, restaurant listing and food delivery company Zomato has acquired last mile logistics startup Runnr for an undisclosed amount. Zomato’s founder and CEO Deepinder Goyal announced the acquisition in a blog post. The Economic Times pegs the deal at $40 million. Runnr’s founder and CEO Mohit Kumar will continue to run the company along with his team and founding members. “With the combination of Zomato and Runnr, we have everything in the stack of building a delightful food delivery service in India and UAE — end to end — listings, discovery, reviews, ordering, and now, logistics,” said Goyal in the blogpost. Why would Zomato buy a logistics company? A potential Zomato–Runnr deal has been talked about since May, and this was a bit odd because, in an (Info Edge) investor call in 2016, Goyal, had said that Zomato prefers to let restaurants do the delivery. Why? Because, as of last year, they lost money when they did delivery. “We make Rs 20 odd rupees as a contribution margin net after everything on our online order business in India. For the 20% of orders, where we have delivery partners, we do negative Rs 2 (as contribution margin). We lose money, in spite of the fact that we’ve outsourced delivery to someone else. The delivery boys of that company only do food during lunch and dinner, and do ecommerce delivery during the rest of the day. Even those guys, our delivery partners, are not able to make this work very well at a…

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