JOIN US Ola, India’s most popular mobility platform, on Tuesday, announced its entry into food delivery space by acquiring Germany based Delivery Hero Group’s Foodpanda India operation in a stock exchange deal.
As part of the deal, Ola has committed to invest $200mn into the Foodpanda India business. According to the analyst, the fund infusion will be India’s largest in online food ordering and delivery industry thus far.
Commenting on the development, Ola Co-founder and CEO Bhavish Aggarwal said he is excited about the partnership with Delivery Hero as the company teams up to take Foodpanda India to the next level.
“As one of India’s pioneers in the food delivery space, Foodpanda has come to be a very efficient and profit-focused business over the last couple of years. With Delivery Hero’s global leadership and Ola’s platform capabilities with unique local insights, this partnership is born out of strength. I look forward to welcoming the Foodpanda India team to the Ola family, said, Aggarwal.
Ola recently closed a $1.1 billion funding round led by Tencent and SoftBank in October, and seeking ways to differentiate itself from Uber’s Indian business.
Foodpanda India claims 12,000 restaurant partners in over 100 cities. That investment is more capital than Foodpanda’s (many) competitors in India have raised to date. The company will benefit from Ola’s scale and efficiencies as a platform.
Saurabh Kochhar who was the CEO of Foodpanda India until recently has decided to move on to pursue other opportunities. Pranay Jivrajka, Founding Partner at Ola, has been appointed as interim CEO of this business unit, supported by the existing leadership team at Foodpanda India.
Niklas Östberg, Chief Executive Officer and Co-founder of Delivery Hero AG, said, the partnership with Ola will allow the company to further consolidate markets where it strategically makes sense to collaborate with leading local players.
“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.vThe Foodpanda India team has done a tremendous job building the business and we look forward to supporting them and the Ola team in the future,” he said.
Ola had earlier burnt its finger in food delivery with a pilot project Ola Café. But the company shut down its operation in 2016, less than a year after operating in a handful of tier-one cities.
Foodpanda had a roller coaster ride with hick ups in operations, including fake listings and unreliable deliveries. The company also laid off 300 staff at the end of 2015. Last year, revenue from Asia, however, remains behind at €35.5 million compared to €48.6 million in Europe and €41.8 million in the Middle East.
Foodpanda’s business is facing intense competition from Swiggy, which is backed by Naspers, Zomato, UberEats and Google Aero.
Ola was founded in Jan 2011 by IIT Bombay alumni Bhavish Aggarwal and Ankit Bhati. Ola, formerly Olacabs, is India’s most popular mobility platform having users across 110 cities can book from over 800,000 vehicles across cabs, auto-rickshaws and taxis.