The coronavirus outbreak has derailed the expansion plans of companies like SmartQ that offer digital cafeteria services to corporates.
Online food-tech startup SmartQ that provides services in the digital cafeteria segment is in talks to be acquired by UK-based Compass Group's India unit for $6-7 million, a source has told Moneycontrol.
The talks were at an advanced stage and the deal could be announced shortly, the person in know of developments said, without sharing the details.
Dev Amritesh, Managing Director for Compass Group in India, declined to comment. SmartQ did not respond to Moneycontrol's emailed queries on the deal and the status of the talks.
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Founded in 2014, by Krishna Wage and Abhishek Ashok, SmartQ provides services such as automated billing kiosks, centralised billing system, NFC prepaid cards, POS software to companies. It works towards enhancing cafeteria and food-court experience by eliminating queues and minimising wait time.
The coronavirus outbreak and the lockdown have derailed the expansion plans of many companies, including startups offering digital cafeteria services to corporates.
With most IT companies asking employees to work from home, startups in this space are feeling the pressure. These firms are now focusing on companies that are planning to bring back employees to offices though in a staggered manner.
Compass Group, along with companies such as Goldman Sachs, Airtel and Razorpay, is also a client of SmartQ.
SmartQ last announced a $1-million fundraise from a consortium of Dubai-based investors in 2018. Existing investor YourNest participated in the round as well.
For a company that has raised around Rs 7 crore so far, the deal seems to be a good bet for the founders and investors who are likely to get some exists.
It wasn't immediately clear if Compass will also take on SmartQ employees as part of the agreement.
To cater to the now-limited segment, companies like SmartQ are also working on slot-based booking systems in the cafeterias to minimise the risk of infection.
Compass Group is one of the world's leading providers of contract food and support services with a presence in 45 countries. It counts over 96 of the Fortune 100 companies as its clients.
Compass Group India is the wholly-owned subsidiary of Compass Group PLC and has been in the country since 2008.
SmartQ competes with the likes of HungerBox and Sodexo. HungerBox has investment from Paytm and investors such as Sabre Partners and Neoplux. It raised $12 million in December.