Singapore’s DealGuru Spins Out Food Delivery Business To Chase New Funding

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DealGuru, one of the major daily deals sites in Singapore, has spun out its food delivery subsidiary, called FoodRunner.

Prior to the new name, the service was called Room Service Deliveries, which DealGuru set up after it acquired Malaysia-based operator, Asian Room Service in October last year.

The acquisition was DealGuru’s first big step into the online food delivery business. Before that, it tried its hand with a small service called Dealivery.sg, run as a subsection of its deals site for about six months.

Since it bought Asian Room Service, DealGuru expanded its presence out of Singapore, into Malaysia and Indonesia (run through a franchisee). Asian Room Service was operating Room Service Deliveries for nine years prior to the acquisition.

With the spin out, DealGuru has placed its CFO, Lance Frey, into the CEO spot for FoodRunner. Part of Frey’s job is to raise funds under the FoodRunner entity for expansion into more markets in Southeast Asia.

Frey said the Philippines, Thailand and Vietnam are next on the radar. New funding will go toward acquiring existing food delivery services in those countries as it enters them, he said.

A quick check on the FoodRunner site showed that its Vietnamese service is listed as Hungry.vn. At time of writing, the site doesn’t exist, but it looks like the company’s booked the URL for starters.

Frey said the company is in talks with investors on funding, and hinted that it might secure a round within the next month or two. FoodRunner saves on some operational costs by sharing resources such as finance and marketing departments with DealGuru. “We’ve got enough money in the bank to complete some acquisitions and keep running for the next year,” he said.

FoodRunner is a pretty early entrant into a space that has investor dollars up for grabs. Rocket Internet-backed rival, Foodpanda, just scooped up $20 million in funding last month.

Foodpanda was launched in April 2012, and has a staff of 150. It’s already in eight Asian countries, including Indonesia, Pakistan, Taiwan and India.

Over at DealGuru headquarters, they’ve probably picked up a thing or two from Foodpanda’s operational manual. Christian Hauville, DealGuru’s former general manager and head of operations, just left two months ago. He started Foodpanda’s Indonesian business when he was working for Rocket Internet.

FoodRunner employs about 120 people, with the majority of them in Malaysia, coming from the former Asian Room Service. Frey said this number is expected to double by next year as it hires and acquires.

It has a customer base of about 80 restaurants in Singapore and 100 in Malaysia, and it has 50,000 registered consumers with the service.

Like its rival, DealGuru is also owned by a German incubator, Rebate Networks. DealGuru logged revenues of $40 million (S$50 million) last year.