Online restaurant discovery and food delivery platform Zomato is in advanced stages of discussions to acquire task management platform Dunzo, a report in financial news website Moneycontrol stated, citing an unnamed person in the know.
The report did not provide further details on the deal size.
A spokesperson for Zomato stated that the firm does not comment on ‘market speculations and rumours’.
“We continue to make aggressive strides and believe in controlling our own destiny. Our goal is to make local commerce efficient across all the cities we serve and will serve in the future and we are committed to doing just that,” a Dunzo spokesperson stated in response to an email from TechCircle.
However, industry experts who are familiar with the sector said that should the deal materialise, Dunzo would add to Zomato’s delivery capabilities.
“Zomato’s strength is its platform. However, delivery is its Achilles heel. Zomato is currently seen to be playing second fiddle in terms of food delivery to Swiggy, which is also looking for other avenues to monetise its fleet,” Satish Meena, senior forecast analyst at research firm Forrester said.
A potential deal is also likely to play to Dunzo’s advantage, which, as a standalone venture, might have not yet found a profitable business model, he added.
The development comes at a time when both Zomato and Dunzo are in the midst raising capital.
A recent report in business daily Mint said that the task management app was in advanced stages of discussions to close $15-20 million (Rs 105-140 crore). The report added that the round will see a new strategic investor put in money along with Dunzo’s existing backer Google, which will invest on a pro-rata basis.
In February this year, Dunzo raised $6.5 million (around Rs 46 crore) from a clutch of new and existing investors including Deep Kalra, the chairman and group chief executive officer of online travel services provider MakeMyTrip. The round valued the firm at $50-51 million.
The restaurant listings company, on the other hand has been quite busy raising capital, launching new offerings and consolidating operations. The company has raised a total of $315 million in multiple tranches since October last year from existing investor Alibaba’s financial services arm Ant Financial, South African technology conglomerate Naspers, US-based growth equity firm Glade Brook and Chinese venture capital firm Shunwei.
Most recently, the company raised $62.5 million (Rs 440.86 crore) in February this year in a fresh funding round from a clutch of investors including Berlin-based Delivery Hero, Shunwei and a third unidentified investor.
In the same month, it also raised Rs 284.42 crore ($39.7 million then) from Glade Brook Capital.
Earlier this month, it sold its UAE business to Germany’s Delivery Hero for $172 million (Rs 1,220 crore then). The deal also saw Delivery Hero invest $50 million into Zomato.
Zomato has also been looking to diversify its offerings. Earlier this month, it announced that it will open more warehouses under its food supplies brand for restaurants HyperPure.