Zomato in talks to acquire on demand service provider Dunzo

Key Highlights

Zomato in plans to acquire on demand service provider startup Dunzo.

Dunzo currently provides its services in six major cities of India.

Zomato plans to enter into hyperlocal delivery space.

The food tech segment is facing high competition and is plunking all available technology and resources to gain more and more profit from the market. Online food order and delivery unicorns i.e. Swiggy and Zomato are acquiring small startups and entering into different segments to expand their portfolio of offerings and grab the online food delivery market. In the same row online food ordering and delivery giant, Zomato is also in talks to buy Bengaluru based on demand service provider startup Dunzo. According to Money Control report, Ant Financial-backed Zomato is in advanced talks with Dunzo a task management app for executing errands.

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Swiggy in February has launched new service Swiggy Stores that delivers household items like meat, flowers, grocery along with several other things within an hour. Acquisition of Dunzo will assist Zomato in taking a successful step in this sector. Dunzo in the last couple of months has also been in talks with institutional investors to raise its next round of funding to $15-20 million. Previously Dunzo was in talks for acquisition with Swiggy and Zomato. But the deal couldn’t take place.

Now the competition between Zomato and Swiggy has widened apart from online food delivery. Swiggy is aggressively expanding its portfolio of offerings it has also entered into the hyperlocal delivery platform by the launch of Swiggy stores and also made entry into microdelivery by the acquisition of SuprDaily. Zomato is also planning to enter into these sectors because if Zomato doesn’t enhance its portfolio then it would be tough for it to raise funds.

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Dunzo is actively providing its services in six major cities of India including Hyderabad, Gurugram, and Bengaluru and according to estimates, it processes over two million transactions a month. Acquisition of Dunzo by Zomato would accelerate its performance in hyperlocal delivery in no time. Therefore Zomato is taking high interest to acquire Dunzo and enhance its business.

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