Food delivery company Zomato, which has newly-minted money from Singapore’s Temasek, is close to buying out a startup that provides members access to sport facilities.
The cash-and-stock transaction values Fitso, a five-year-old Gurugram-based company, at roughly $20 million, according to a person intimately familiar with the deal. “Negotiations have reached an advanced stage and the term sheet is being finalised,” said this person, asking not to be named.
Fitso started as a partner-finding app for runners and cyclists. It now offers members fitness solutions along with personal coaches and sports facilities, mainly swimming pools.
When contacted, Zomato declined comment. Saurabh Aggarwal, a co-founder of Fitso, said, “There is no such deal at this point of time.”
Fitso is an unusual acquisition for Zomato, an enterprise not germane to its mainstay business and coming at a time when people are staying away from swimming pools due to fears of catching the coronavirus. In June, Moneycontrol reported that Zomato parted ways with TechEagle Innovations, a startup it ‘acquihired’ two years ago to deliver food through drones.
Zomato is also pursuing Fitso smack in the middle of a pandemic, when its operations have been upended by the lockdown. The company, which is also based in Gurugram, was forced to withdraw from several cities, cut jobs and reduce salaries. Though business is trickling up, a full recovery is months away because people are reluctant to order food and vast swathes of restaurants have shut shop.
Moneycontrol reported in May that the Competition Commission of India (CCI) was investigating the acquisition of Uber Eats India by Zomato. In August, Moneycontrol reported that US investment firm Tiger Global Management was preparing to invest up to $100 million with an option to inject another $100 million in Zomato.
Fitso is not unfamiliar to Zomato though. Co-founder Naman Sharma was previously the head of mobile products at Zomato, according to his LinkedIn profile. Zomato’s co-founder Pankaj Chaddah is a recent investor in Fitso.
Fitso has so far raised a combined $1.7 million over five rounds, according to Crunchbase, a platform that collates investment and funding information. The company has 10 investors, it said.
Zomato raised Rs 456 crore in a fresh funding round from MacRitchie Investments, a unit of Temasek.