Ola Acquires India Unit Of Foodpanda, To Further Invest $200 Million
Ola acquires India unit of Foodpanda, to further invest $200 million:
India based cab aggregator Ola has acquired ‘Foodpanda India’, the third largest player in the food delivery business in India, from Germany based Delivery Hero Group, in an all-stock deal; thereby once again trying its luck in the food delivery space. Companies have not disclosed the size of the deal; however, various industry sources have estimated the size of the transaction at around $50 million. Ola has also committed further investments of $200 million in the Foodpanda India, considered as one of the largest investment in an Indian online food ordering & delivery company. In a related development Saurabh Kochhar, the erstwhile CEO of Foodpanda India has decided to move on to pursue other opportunities and in the meanwhile, Pranay Jivrajka, founding partner at Ola, will act as the interim CEO of Foodpanda.
Ola Acquires India Unit of Foodpanda, to Further Invest $200 Million
Earlier in 2014 also, Ola had forayed into the food delivery business with its offerings ‘Ola Café’ & ‘Ola Store’ in cities like Delhi, Mumbai and Bengaluru, however, the same were shut down later in 2016. According to recent media reports, Ola had been looking at entering again into the food delivery business to take on ‘UberEATS’. Uber had announced the launch of its food delivery service ‘UberEats’ almost six months ago.
Bhavish Aggarwal, CEO of Ola, said, “Foodpanda has come to be a very efficient and profit-focused business over the last couple of years. Our commitment to investing $200 million in Foodpanda India will help the business be focused on growth by creating value for customers and partners. With Delivery Hero’s global leadership and Ola’s platform capabilities with unique local insights, this partnership is born out of strength.”
Niklas Östberg, Chief Executive Officer and Co-Founder of Delivery Hero AG, while asserting that the partnership will allow the company to consolidate markets, said, “At the same time, we consider our stake in Ola as a very valuable asset while Ola’s investment commitment in Foodpanda India is a clear and confident signal to the Indian market”.
Delivery Hero had acquired Foodpanda from ‘Rocket Internet’ last year, for expanding its food-ordering business into Asia, the Middle East and Eastern Europe. Foodpanda claims to have more than 15,000 restaurants across 100 Indian cities on its platform. The revenues of the company in the Financial year (FY) 2016-17 stood at INR 62.16 crore compared to INR 37.81 crore in the previous financial year. Moreover, the losses of the company declined 69% to INR 44.81 crore in FY 2016-17, from INR 142.64 crore in FY 2015-16. The stated aim of the company is to become profitable by 2019. Its order numbers from India and Southeast Asia had grown 47% in the third quarter of 2017 compared to the same period last year.
The ride for Foodpanda has not been smooth in India, as according to the media reports, the company had faced several operations difficulties, including fake listings and unreliable deliveries, while it also fired 300 staff members at the end of 2015.