Ride-hailing giant Ola acquired food ordering startup Foodpanda India in an all-stock deal in its second attempt to enter the food delivery business in India as it looks to counter Uber Eats in a fledgling market.
Ola said has struck a partnership with Germany-based Delivery Hero Group, Foodpanda’s parent, and the deal includes the transfer of the startup’s India business to Ola, the cab aggregator said in a statement.
Ola’s decision to give food delivery a second chance came nearly seven months after its San Francisco-based rival Uber started Uber Eats in India. It had forayed into the business through Ola Cafe but shut it down later.
Ola said it will invest $200 million (around Rs 1330 crore) into the Foodpanda India to scale operations., “Our commitment to invest in Foodpanda India will help the business be focused on growth by creating value for customers and partners,” Bhavish Aggarwal, co-founder and chief executive officer at Ola, said.
Saurabh Kochhar, the CEO of Foodpanda India, has decided to move on to pursue other opportunities, Ola said in the statement. Pranay Jivrajka, founding partner at Ola, has been appointed as interim CEO of the business.
Niklas Östberg, chief executive officer and co-founder of Delivery Hero AG, said the the partnership with Ola will allow the company to further consolidate market. “It strategically makes sense to collaborate with leading local players.”
FoodPanda, which at present serves 15,000 restaurants across 100 cities in India, was able to narrow down its losses in the year ended March. Its losses came down to Rs 44.81 crore from Rs 142.64 crore, as per the company statement. Revenue rose to Rs 62.16 crore from Rs 37.81 crore in the previous year.
Bloomberg Quint
