AirAsia’s cargo and logistics arm Teleport is acquiring Malaysian online food delivery platform DeliverEat for for US$9.8 million (RM41.4 million). With the purchase, which is expected to be concluded by the end of September, AirAsia is set to make further inroads into the e-commerce scene.

As part of the acquisition, DeliverEat founders Leong Shir Mein and Tan Suan Sear will join the management team at Teleport and AirAsia Digital, the umbrella for the low-cost carrier’s non aviation ventures. The deal also brings on board venture capital firm Gobi Partners, an investor in DeliverEat.

DeliverEat is a homegrown effort from Penang, established in 2012 by Leong and Tan. From its humble beginnings, the online food delivery platform now offers food and express delivery services on an on-demand basis from more than 4,000 merchants (consisting of restaurants, wet markets, pharmacies and groceries), carried out by its fleet of up to 4,000 registered delivery partners, and has delivered more than one million orders to date.

AirAsia CEO Tony Fernades said the acquisition comes at an opportune time, as the company had launched AirAsia food services in Penang in April. “With DeliverEat joining forces with Teleport, we will be able to drive further growth of fast and affordable delivery transportation options within our key markets as e-commerce continues to surge,” he said.

The purchase of DeliverEat will strengthen AirAsia’s foothold in the food delivery space. It already provides online food delivery services in Malaysia, Singapore and Thailand through its SuperApp digital business, and is now set to expand its merchant list in AirAsia food in these cities when DeliverEat’s merchants are added to its platform.

Leveraging on AirAsia’s network, Teleport’s ambition is to deliver door-to-door in under 24 hours across Southeast Asia. With its core business being severely impacted due to the Covid-19 pandemic, the company has been on a diversifying path of late.

In June, the company announced that it would soon begin offering a ride-hailing service that would be, in the words of CEO Tony Fernandes, different from Grab and Uber, with a photo of Toyota Vellfire and Alphards suggesting that the said service would be angled along more premium lines. Last month, the company announced that it had acquired Gojek’s business in Thailand for US$50 million (RM211.3 million), allowing it to expand into ride-hailing, delivery and fintech services in the kingdom without building from scratch.