Ola's investment commitment of $200 million in Foodpanda's India is the largest funds infusion in an Indian online food company till now.
Foodpanda, owned by Germany’s Delivery Hero, will now be helmed by a ride-hailing app-based Indian company, Ola, which will invest $200 million in the food delivery start-up. This will help the taxi-hailing company re-enter the food delivery business, which it exited in 2016. Ola’s acquisition of Foodpanda India is in direct competition with rival Uber Technologies, which runs UberEATS, a similar service. However, while Foodpanda is present in more than 100 Indian cities, UberEATS delivers to only about half-a-dozen places in the country.
Here are 10 things to know about Ola’s acquisition of Foodpanda India:
1. SoftBank-backed Ola’s investment commitment of $200 million in Foodpanda’s India business, is the largest such funds infusion in an Indian online food ordering and delivery company till now, according to a report by Press Trust of India (PTI).
2. Under the deal, Foodpanda’s India business will be transferred while Delivery Hero will get shares in Ola, the companies said in a statement.
3. “The partnership with Ola will allow us to further consolidate markets where it strategically makes sense to collaborate with leading local players,” Delivery Hero Chief Executive Niklas Ostberg said.
4. Ola said Foodpanda India will benefit from its scale and efficiencies as a platform and it will surely continue to collaborate with Delivery Hero on building the online food delivery ecosystem in India.5. Saurabh Kochhar, who was the CEO of Foodpanda India until recently, has decided to move on to pursue other opportunities. The Founding Partner Pranay Jivrajka also has been appointed as interim CEO of this business unit, supported by the existing leadership team at Foodpanda India.
6. “I’m excited about our partnership with Delivery Hero as we team up to take Foodpanda India to the next level. Our commitment to investing $200 million in Foodpanda India will help the business focusing on growth”. Ola Co-founder and CEO Bhavish Aggarwal said.
7. Delivery Hero, which floated on the stock exchange in Germany in June, had acquired Foodpanda and its Indian subsidiary in December 2016.
8. In 2014, Ola had forayed into the food delivery business with Ola Cafe. And meanwhile, expanded the offering to cities like Delhi, Mumbai and Bengaluru. However, the Cafe later had an unfateful ending.
9. Foodpanda’s revenue stood at Rs. 62.16 crores in 2016-17 compared to Rs. 37.81 crore in the previous fiscal, on the back of strong growth in orders from key markets. Its losses too declined 69 percent to Rs. 44.81 crore in 2016-17, from Rs. 142.64 crore in 2015-16.
10. Competition in the food delivery segment has been intense with the likes of Zomato and Swiggy surely competing aggressively to capture the market. It heated up further after the entry of UberEATS a few months ago.