Food delivery and restaurant discovery firm Zomato is in advance talks to acquire Bangalore-based on demand service provider Dunzo, a person privy to the development said. The deal size couldn't be immediately ascertained.
The development happens at a time when Zomato's rival Swiggy has expanded its services from food to on-demand product delivery. Dunzo will give Zomato the much needed edge in this segment. Interestingly, Dunzo has also been in conversation with institutional investors to raise its next round of funding to the tune of $15-20 million in the last couple of months.
Swiggy launched Swiggy Stores, which delivers household items like grocery, flowers and meat among other things within an hour in February. It is also learnt that Dunzo was in talks with Swiggy for an acquisition. However, the deal couldn't take off.
"We do not comment on market speculations and rumours," Zomato's spokeswomen told Moneycontrol. Swiggy declined to comment and Dunzo did not immediately respond to our email.
Dunzo was launched in 2015 by Kabeer Biswas, Mukund Jha, Ankur Aggarwal and Dalvir Suri. It was started on Whatsapp and has now grown to become an app available across Bengaluru, Pune, Hyderabad, Gurgaon and Delhi. The company delivers products from local stores and has also been running bike taxi services in Gurugram.
In 2017, Google came on board with an investment of $12.3 million. This was also Google's first direct investment in an Indian startup. Recently, it also raised Rs 3 crore from MakeMyTrip founder Deep Kalra.
After a slump in 2016, the hyperlocal delivery segment is again gaining traction with top investors trying to get a slice of the burgeoning pie.
Founded by Deepinder Goyal in 2008, Zomato is currently present across 24 countries. It claims to be serving 65 million users every month across services such as restaurant reviews, restaurant discovery, food delivery and dining out transactions.
It last announced the acquisition of TechEagle Innovations to work on drone-based deliveries in India. In 2017, it also acquired Nexus venture-backed last mile delivery firm Runnr.