DealGuru Holdings, the parent company of Deal.com.sg and Room Service Dealivery, has announced it has separated its food delivery subsidiary, which will henceforth be called “Food Runner” (logo pictured above). And with the new subsidiary, it will be expanding aggressively into other countries within SEA, such as Thailand, Philippines, and Vietnam.
Operations in Singapore, Malaysia, and Indonesia will be under Room Service Dealivery’s brand, which dishes a couple of million dollars’ worth of food deliveries to over 50,000 registered users. Food Runner will have an independent management board on its own, but DealGuru will still be active in Road Runner’s operations since the finances will come from its parent company. It will also take advantage of DealGuru’s strengths in online marketing, but ultimately DealGuru will not dictate what the delivery man does.
On the decision for the spin-off, former DealGuru CFO and now Food Runner CEO Lance Frey explains:
The business has been growing strongly. We felt it had reached a point where it made sense to operate with the greater flexibility and focus that a separate business provides. While we will continue to improve our position in Singapore and Malaysia, the next big opportunity is expansion into other Southeast Asian markets, adding millions of consumers to our reach.
The company will be looking to either build or buy food delivery companies to strengthen its position within SEA. Lance is pretty tight-lipped about what’s exactly happening; but apparently the team is already in talks with some local delivery companies.
Founder and CEO of Rebate Networks Michael Brehm, an investor at DealGuru, predicts the food delivery market in SEA will be valued at $390 million by 2015. This figure is “driven by consumer demand, rising incomes, and continued urbanization”, says Michael. Also, the value is a replication of the success seen in other players within the food delivery markets, where they are generating revenues in the millions. Some noteworthy ones include Just Eat and Seamless/Grubhub from United States, Delivery Hero from Europe, Yemeksepeti from Turkey, and Delivery Club and Foodik from Russia.