EatStreet is delivering.
The Madison startup that lets people order restaurant meals on a mobile app has bought some of the assets of a Philadelphia startup, Zoomer, that provides meal deliveries.
EatStreet will offer delivery service in 10 cities, including Madison and Milwaukee. In fact, meals have been delivered to Madison customers from about 25 Madison restaurants as part of a test project over the past five months, CEO and co-founder Matt Howard said.
“We tried to keep it under the radar,” he said. “We knew we wanted to make the bigger move into delivery.”
Terms of the acquisition, which was finalized Monday, have not been disclosed.
EatStreet bought Zoomer’s contracts with 1,000 delivery drivers and about 200 restaurant partnerships. The drivers are being hired as EatStreet employees, with benefits.
“We feel pretty strongly that in order for the drivers to be aligned in our mission, we want to make them EatStreet employees,” Howard, 27, said in an interview.
Thirty Zoomer employees — in jobs such as driver dispatch, operations and sales — also are joining EatStreet, which will open a Philadelphia office for them.
That sends EatStreet’s employee count soaring from 150 to 1,180.
Zoomer has been operating in Madison for 18 months, with EatStreet’s blessing, Howard said. He said Zoomer was not a competitor because it didn’t provide meal ordering; it only delivered meals.
“We saw them popping up in our markets and were so impressed with their delivery operations that we reached out to them and helped them expand,” Howard said. “We did encourage our restaurants to sign up with Zoomer.”
About 40 Madison-area restaurants, of more than 200 that use EatStreet, began the company’s delivery service on Monday, Howard said. Those with the highest delivery volume will be targeted first.
“We’re not going to do every restaurant to start but that is the long-term vision,” he said.
Zoomer had drivers in 18 cities; EatStreet chose assets for 10 of the cities where it already operates. The purchase includes Zoomer software that lets customers track their orders.
With growing competition in meal delivery, including Uber and Amazon Prime in some cities, Howard is confident about EatStreet. “We can offer the best customer experience out there,” he said.
Founded in 2010 and based at 316 W. Washington Ave., EatStreet connects diners to more than 15,000 restaurants in more than 250 cities.
The company has received $38.5 million from investors, including $11 million last fall, and obtained a $4 million bank loan. The new funding is financing the growth, Howard said.