Indian food delivery giant Zomato has acquired Bengaluru-based corporate catering startup Tonguestun. The deal is expected to be a mix of cash and stock worth around ₹129 crores ($18 million), according to people familiar with the development.
The acquisition has been confirmed by Deepinder Goyal, Founder and CEO, Zomato, but the details of the deal remain undisclosed.
Talking about the acquisition Deepinder Goyal, said, “We don’t see the ceiling to how big this market could become just yet. What we know is that this market is very high frequency, and customers are very sticky as they end up placing more than 20 orders a month on the Tonguestun platform.”
Founded by Manjunath Ramakrishnan in 2012, Tonguestun provides an online marketplace for enterprises to discover, engage and manage food at their workplace. The startup claims to serve around 1 lakh meals per day to more than 1,500 companies from more than 1,000 curated food partners.
This foodtech startup is operational in six cities across India, including, Bengaluru, Hyderabad, Pune, Mumbai, Chennai, Gurugram & Noida. Some of its clients include Accenture, Mindtree, Yahoo, Deloitte, among many others.
Tonguestun has raised less than $5 million from Uniqorn Ventures, a hospitality fund run by investment bank o3 Capital, and Haresh Chawla, a partner at private equity fund True North.
Other players in the B2B corporate catering sector include Bengaluru-based HungerBox, Zzungry, Elior, among many others.
Earlier in July, HungerBox raised around ₹30 crores in series A funding led by South Korea based investment firm Neoplux and India focussed PE fund, Sabre Partners. It is also backed by Singapore-based Lionrock Capital and Infosys‘ co-founder Kris Gopalakrishnan.
Zomato is looking to leverage Tonguestun’s corporate network to enable its restaurant partners with the opportunity to serve the corporate market.
The latest acquisition will help Zomato expand into the corporate catering segment as it competes with another food delivery giant Swiggy for market domination.
Last month, Zomato also launched its food delivery services in seven tier 2 cities, as it looks to expand its geographical outreach.