EatStreet Grows Through Partial Acquisition of Pennsylvania Startup
Since launching in 2010, the Madison, WI-based startup EatStreet has fueled its growth by raising venture capital, introducing its food ordering technology in hundreds of cities across the U.S., and bringing on dozens of new employees.
Now comes news that EatStreet has made what co-founder and CEO Matt Howard calls its first “highlighted acquisition.” The company says it has agreed to acquire “certain assets” from Zoomer, a Philadelphia-based food delivery startup that reportedly will stop operating later this month.
Under the terms of the deal, which was announced on Wednesday, Zoomer will transfer select contracts it had inked with restaurants and drivers to EatStreet, Howard says. Additionally, about 30 employees who until recently had worked out of Zoomer’s corporate offices are now joining EatStreet’s 150-person workforce, he adds.
Howard declined to disclose how much EatStreet paid for the Zoomer assets.
Technically Philly reported last week that Zoomer was likely to shut down. The company reportedly had more than 100 employees. Competition from other delivery services was one factor that led to Zoomer pulling the plug, according to an e-mail it sent to some of the restaurants it had worked with.
The contracts EatStreet acquired from Zoomer are confined to 10 cities, all of which EatStreet currently operates in, Howard says (one of them is Madison). Still, the company figures to strengthen its presence in those markets; about 1,000 new delivery drivers and more than 200 restaurants have joined EatStreet as part of the Zoomer deal.
“We already have the ground operations and large restaurant list in these markets,” Howard says. “This was just a really good way to complement what we had already created.”
EatStreet plans to start operating a second corporate office in Philadelphia, Howard says, and a satellite office in each of the nine cities where the company acquired Zoomer-affiliated assets, excluding Madison.
Howard says that over the past few years, there has been a “major consolidation” in the business of food ordering and delivery.
“I don’t think that’s going to stop,” he says. “I think you are going to see more deals very similar to this, as the space continues to develop.”
EatStreet has raised more than $40 million from investors, including an $11 million equity financing round in October. The startup says it currently serves more than 15,000 restaurants across more than 250 metro areas in the U.S.