One of the hot spaces in the startup ecosystem, foodtech has been delivering something special for the audience almost every week. The segment is largely driven by two foodtech majors Zomato and Swiggy, and today the former has caught attention with the acquisition of TongueStun, a caterers and restaurants aggregation platform.
Unlike a slew of recent distress acquisition deals, the cash and stock deal has been disclosed by the Sequoia Capital-backed company, which is around $18 million, reports TOI.
The acquisition should uplift the positioning of the six-year-old startup which has so far raised about $5 million from the likes of Uniqorn Venture and Haresh Chawla, a partner at private equity fund, True North.
Founded by Manjunath Ramkrishnan and Sundhar Varun, TongueStun has over 1,000 curated food partners along with 1,500 companies on its platform in six cities including Bengaluru, Mumbai, Hyderabad, Gurugram, and Pune.
TongueStun’s community connects corporate companies to caterers and also provides simplified food ordering and secure payments options, enabling clients to organize a great meal experience at the workplace.
It claims to enable 1 lakh meal per day and has tied up with Accenture, Mindtree, Genpact, Deloitte among others to deliver the meal.
The company works on the similar model of PapasTiffin and Hungerbox.
Following the acquisition, Zomato will integrate TongueStun app into it. From Zomato point of view, TongueStun’s acquisition will help it to scale its business in corporate segment. Over the years, ToungueStun managed to retain a major chunk of acquired clientele base who place over 20 orders in a month.
The development comes against the backdrop of Zomato’s announcement of delisting non-licenced restaurant partners from its platform. After FSSAI stringent clampdown over non-compliance restaurants, Zomato has taken the decision, which has over 50,000 partners on its platform.
The number of delisted partners is yet to be disclosed but it will surely affect the number of orders in a month, where Zomato claims over 13 million monthly order run rate.
This is the second acquisition for Zomato in last one year. In September 2017, it had acquired hyperlocal logistics startup Runnr with 1600 strong workforce in an all-stock deal. Since the acquisition, Zomato has been able to ramp up its online ordering part.
Ever since raising $200 million round from Ant Financial in February, Zomato has been exploring several avenues to accelerate its scale. Besides online ordering, it had announced to get into farm to fork business. It actually wants to supply raw materials to 50,000 strong restaurant partner base.