Madison firm EatStreet is partially acquiring Zoomer - Technical.ly Philly

Growth

Feb. 2, 2017 10:41 am

Madison firm EatStreet is partially acquiring Zoomer

EatStreet is taking on Zoomer's drivers, restaurant clients and data in 10 markets, as well as 30 Zoomer employees. But there's still more to come on this story.
EatStreet will take over Zoomer’s operations in 10 markets.

EatStreet will take over Zoomer's operations in 10 markets.

(Courtesy photo)

It turns out our suspicion was true: some form of acquisition deal was involved in the shutdown of B2B food delivery startup Zoomer.

On Wednesday, Madison, Wis.-based EatStreet announced through a press release the acquisition of “certain Zoomer assets” in a move that would allow EatStreet to expand to 10 U.S. markets where it previously held no presence.

Zoomer CEO Justin Goldman declined to comment on the terms of the agreement but said, “It wasn’t for nothing.” (Meaning that money was exchanged.)

“They basically acquired our business in those 10 markets,” the founder told Technical.ly. “They acquired all of the business assets: our driver contracts, our restaurant clients and the data.”

As part of the deal, about 1,000 delivery drivers and some 200 restaurants from Navy Yard-based Zoomer, which is now officially defunct, joined EatStreet starting Wednesday. The drivers from those ten markets will convert from independent contractors (Zoomer’s old model) to W-2 employees of EatStreet.

Additionally, about 30 Zoomer employees from across the markets will also join EatStreet, “spanning functional areas from dispatch, operations, in-market leaders and sales,” per the press release. It’s not clear how many of these workers are Philly-based, but EatStreet did say it will open a Philly office for some of them. Location TBD.

Neither Goldman nor any of the members of the defunct company’s exec team will be joining EatStreet as part of the deal. Also of note: Zoomer’s technology platform was not part of the sale. These two facts alone may not say much, but put together, they hint at more news coming from the aftermath of the startup’s shutdown. Goldman also pointed us in that direction.

“The whole story is not there yet,” Goldman said. “There’s some good stuff coming for Philly and EatStreet is only part of the story.”

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These are the markets where EatStreet is taking over Zoomer’s operation:

  • Ann Arbor, Mich.
  • East Lansing, Mich.
  • Champaign, Ill.
  • Ithaca, N.Y.
  • Syracuse, N.Y.
  • Madison, Wis.
  • Milwaukee, Wis.
  • Newark, Del.
  • New Brunswick, N.J.
  • Richmond, Va.

It’s of note that, since Zoomer remained fairly quiet as it attempted to prove its concept, it’s not clear in which markets Zoomer was officially operating. We had word the company had presence in about two dozen markets but have been unable to confirm this.

For some context on EatStreet: it’s a seven-year-old, venture-backed food ordering service that reportedly offers its services to a client base of 15,000 restaurants in 250 cities. The company’s headcount, including those hopping aboard from Zoomer, is at 150.

“We’re obsessed with ensuring the food-ordering experience is effortless for customers,” said in the press release Matt Howard, EatStreet CEO. “We’ve built a customer-driven delivery strategy and bringing on board the talented Zoomer workforce allows us to own the process from the moment of hunger to the time the food arrives.”

As the Zoomer saga keeps unfolding, here’s one nostalgic thought from its founder:

“Zoomer built something quite special,” Goldman said. “The businesses that we created in those markets were unique to restaurants and drivers. A lot of the key staff that were Philly-based are continuing on with EatStreet and, in a lot of ways, they will continue what Zoomer started.”

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