Food-technology start-up Zomato and UberEats are in talks with food delivery startup Runnr in a move that will help Zomato strengthen its food delivery business.

Zomato currently aggregates restaurants on its platform and works with third-party delivery partners such as Runnr and Grab to fulfil deliveries.It started food delivery services in May 2015.

The deal is likely to give Zomato a captive fleet of delivery personnel, a model similar to its rival Swiggy (Bundl Technologies Pvt. Ltd). While the final contours of the transaction are yet to be finalized, Zomato is likely to buy Runnr in an all-stock deal for about $20 million.

Runnr earlier known as Roadrunnr was founded in 2015 by Mohit Kumar and Arpit Dave who worked together at Flipkart.It was formed after the merger of two of the most high-profile and well-funded startups of 2015, hyperlocal logistics Roadrunnr and food-delivery venture TinyOwl and had together raised over $50 million in funding.

Both UberEATS and Zomato have put in a term sheet at different valuations.There may be a chance that the financing round may go through for now as the board decided not to go for a complete sale, a person close to the matter said on the condition of anonymity. A term sheet is a non-binding agreement for a potential investment.

The entity Runnr had raised Rs 47 crore from existing investors Nexus Venture Partners and Blume Ventures in September to start the altered model of delivery.

Runnr acquired Mumbai-based food delivery start-up Tinyowl Technology Pvt. Ltd in June 2016 and launched a consumer-facing food delivery platform a couple of months later. The consumer-facing business has since been suspended.

“Runnr has significantly reduced cash burn to $300,000-500,000 per month. But they have less than six months’ cash left. The current market scenario is grim and it may be difficult to raise more,”

said a person familiar to the situation.

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Sangeeta Ghosh

Sangeeta is an engineering graduate and is passionate about painting and music. She is always blooming with new ideas and is a real go to person when you are searching for one. Exploring good dining places across the city is her favourite off-field indulgence. At KnowStartup, she is an integral part of the editorial team.

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