UberEATS, the food delivery service that was launched by cab aggregator Uber in India earlier this month and restaurant directory portal Zomato that launched its food delivery service in May 2015 are in talks with last mile delivery startup Runnr for acquisition.

As per resources, both of the companies have given term sheet to Runnr.  While UberEATS has pegged the company’s valuation at $50 million, Zomato is offering $20-30 million in an all-stock deal. The sale is anticipated to be an acqui-hire as it will give Zomato or UberEATS a ready pool of employees to strengthen their food delivery business and stand against rivals like Swiggy, Foodpanda.

Zomato and UberEATS are in Talk for Acquisition of Runnr

With the merger of on-demand food delivery startup TinyOwl and business-to-business last mile delivery startup RoadRunnr, Runnr was formed in July 2016. The combined entity then pivoted to food delivery, focusing largely on the consumer side and B2B connecting corporate employees and restaurants on a common portal. The company recently pivoted to focus on B2B orders across 15 categories including food, e-commerce and others.

Uber launched its on-demand food delivery app UberEATS in Mumbai earlier this month partnering with over 200 restaurants. Zomato currently aggregates restaurants on its platform and works with third-party delivery partners such as Runnr and Grab to fulfil deliveries. Zomato started food delivery services in May 2015.

Due to common challenges in last mile delivery startups – thin profit margins, customer acquisitions etc, a lot of food-tech startups had shut their shop in last year. The entry of UberEATS and Google Aero’s into the Indian food delivery space has given a new twist. Their strategies for sustainability would be a learning scope for other startups if things go well for them. Earlier, Ola also tried its luck in Ola Café and Ola Store but shut its shop within a year of execution.