Pickingo holds food delivery plans as deal with Zomato failed to take off

Pickingo, a hyper-local delivery company has hold down its plan to enter the food-delivery landscape after a proposed deal with online restaurant aggregator Zomato failed to take-off.
Pickingo

Pickingo, a hyper-local delivery company has hold down its plan to enter the food-delivery landscape after a proposed deal with online restaurant aggregator Zomato failed to take-off.
Zomato had announced an investment in the Gurgaon-based Pickingo two months ago, but the deal was never sealed despite a term-sheet which indicates an intention to invest having been handed out to the hyper local delivery company, said the sources.
Pickingo, which has an employee count of 250, has since stopped a pilot project in food delivery and plans to focus attention on its existing business in reverse logistics where it has clients such as Snapdeal, Paytm and Jabong.
"It makes sense for our company to not burn more cash and focus on our core strength, which is reverse logistics," said a spokesperson.
"On the day when it was to have signed the shareholder agreement with Pickingo, Zomato backed out saying its investors did not approve multiple investments in same space and the high cashburn," said one investor who was aware of the negotiations.
The proposed deal would have seen Zomato pick up less than a tenth of the stake in Pickingo.
Zomato had issued a press release on September 1, this year announcing that it was picking up strategic stakes in two companies namely Pickingo and Grab, to enable last mile delivery for its food ordering business. It had also announced an intention to partner with Delhivery. Zomato says its investment in Grab is going as per plan.
"We are piloting with 100 merchants and it should climb to 1000 by month-end."
Experts believe Zomato's pull-out from the Pickingo deal indicates the inherent problems in the food technology space in India.

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