Food aggregator Swiggy is in early talks with Times Internet-backed Dineout, three people aware of the discussions said. The food delivery app is exploring either a complete or partial buyout of the restaurant management and table booking firm, the people said.
“Talks with Swiggy began about two months ago. Late last year, Dineout was also in talks with Cred,” one of the persons cited above said without giving a timeframe.The talks are in the preliminary stages and due diligence is underway, a second person added.
Both did not comment on the size of the potential deal. Previously, media reports on the talks between Dineout and Cred had pegged Dineout’s valuation at $25-50 million.
“There is nothing like that as of now. These are talks that keep happening. We are partners with Swiggy and Cred on a couple of initiatives and maybe that is why this has come up,” Dineout’s co-founder Ankit Mehrotra said.
Swiggy declined to comment.
Dineout was founded by Mehrotra, Nikhil Bakshi, Sahil Jain, and Vivek Kapoor in 2012, and was acquired by Times Internet in 2014 through its TimesCity platform for an estimated value of ₹60 crore.
SoftBank-backed Swiggy closed a $700 million funding round in January led by asset management firm Invesco, almost doubling its valuation from its previous fund raise to $10.7 billion.
The firm’s food delivery business nearly doubled in gross order value in the past year, it said at the time, adding the fresh capital will help it to accelerate growth on its core platform besides making fresh investments to grow its hyperlocal delivery Instamart.
If the deal with Dineout goes through, Swiggy may be following the route taken by Zomato, for offering more of a 360-degree ecosystem for restaurants, said Samir Kuckreja, founder and chief executive officer of Tasanaya Hospitality, a boutique consulting firm, which also functions as a transaction advisory for restaurants.
Dineout has a point-of-sale (PoS) system that is widely used by restaurants, a loyalty programme and a table reservation system, Kuckreja pointed out. The acquisition could lead to Swiggy acquiring these technologies, teams, and customers who are using these platforms already.
“If Swiggy was to go down this path, they would be trying to be a food and beverage solutions provider across the industry in different areas and not just a delivery aggregator. Zomato has done this for many years and even ended up shutting down some verticals that did not work,” Kuckreja said.
Dineout acquired Gourmet Passport, a membership app that provides access to complimentary food, drinks, and buffets. It also acquired Torqus, a cloud-based PoS firm.
The company bought out inResto Services, a restaurant management system, for an undisclosed amount in 2018. The system helps digitize ordering and loyalty programmes of restaurants. Dineout competes with EazyDiner, which was founded in 2014 for the national capital region.
Times Internet is a digital products company and the digital venture of the Times Group. The company has online real estate listings portal magicBricks, music streaming service Gaana, and personal finance platform ETMoney.
