Zomato cancels acquisition deal with drone startup TechEagle

Online food delivery major Zomato has decided to separate its ways from drone delivery startup TechEagle Innovations after 18 months of acquiring the Lucknow-based startup. Both companies would continue to operate as individual entities from now. 

Zomato had acquired TechEagle in December 2018 for an undisclosed amount. The consolidation was a part of the food tech firm’s plan of drone-based food delivery in the country.

Responding to Entrackr’s queries, a Zomato spokesperson confirmed the development. “While we are thankful to Vikram for building a strong engineering foundation for our drones team at Zomato, we are no longer aligned about our future goals and have decided to operate as separate entities. Vikram and his team are supremely talented and we wish nothing but the best for them,” the spokesperson said.

Moneycontrol reported the development first.

TechEagle was founded by IIT-Kanpur alumni Meena with a focus on custom-made drones capable of carrying up to 5 kg upload. The five-year-old company claims to have on-boarded 25 drones and completed 2,250 flight hours and traveled 78,750-kilometre distance so far. 

The development comes soon after Zomato, along with 12 other companies, received a nod from the regulator Directorate General of Civil Aviation to conduct their experimental flights beyond visual line of sight or BVLOS drones. The Gurugram-based company is expected to start conducting its experimental flight in the first week of July. 

TechEagle was the second acquisition made by Zomato in the past three years. In 2017, the food tech unicorn had bought last-mile delivery fleet startup Runnr. 

While the exact reasons for the separation aren’t clear at the moment, it seems Zomato has developed in-house capabilities to build and test drones. 

Zomato had tested its first drone delivery with a fusion of rotary-wing and fixed-wing in June last year. It successfully covered a distance of 5 km carrying a payload of 5 kgs in 10 minutes. 

This is the second occasion in recent times when Zomato has moved away from their original plan. The company had decided to shut down its grocery delivery vertical ‘Zomato Market’ earlier this month after launching in April.