Ola has announced that it tapping food delivery segment again and is buying Foodpanda India from its Germany-based parent Delivery Hero Group. The company did not share financial details of the deal but said that it includes an exchange of Ola stock.
With this deal, Saurabh Kochhar, co-founder and CEO of Foodpanda India has quit the company 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.
To begin the food delivery segment again, Ola said that it will invest $200 million into the Foodpanda India business. Foodpanda India claims to have around 15,000 restaurant partners across 100 cities in India.
Note that, this is Ola’s second attempt a food delivery. The cab aggregator had launched OlaCafe in March 2015 in parts of Bangalore, Hyderabad, Delhi and Mumbai, however, the service had shut down after a year.
Foodpanda India reported revenues of Rs 62.16 crore for the financial year 2016-2017 (FY 16-17) an increase of 64% from Rs 37.81 crore. Meanwhile, Foodpanda India said that it is working to reduce its losses. For FY16-17, registered a loss of Rs 44.81 crore compared to Rs 142.64 crore in the same year last year.
Delivery Hero and Foodpanda history
In December 2016, Delivery Hero finally acquired Foodpanda for an undisclosed amount as the food delivery companies decided to consolidate their operations. Note both the companies were housed under Rocket Internet and the two companies had a history of buying each other’s businesses in different countries.
In 2013, Delivery Hero had invested $5 million in Pune based online food ordering startup TastyKhana. One and a half years following this, Foodpanda acquired TastyKhana in November 2014. At this time, Foodpanda also acquired Delivery Hero’s Mexican businesses PedidosYa, SeMeAntoja and Superantojo and Donesi.com in Serbia, Montenegro, Bosnia and Herzegovina, as well as Pauza.hr in Crotia and NetPincer in Hungary to expand its presence in Europe. Meanwhile, Delivery Hero acquired Foodpanda’s affiliate brand Hellofood in Argentina, Chile, Colombia, Ecuador and Peru.
With this service, Ola is trying battle its direct rival Uber, which started its food delivery service UberEATS, which was started in India with Mumbai in June 2017, and then later expanded to Gurgaon, Bangalore, Chennai, Chandigarh, Delhi, and Hyderabad.
Besides that, the food delivery space is being dominated by players like Swiggy and Zomato. Zomato had started its online ordering service back in March 2015,
Swiggy was founded in August 2014, and is currently available in 8 cities (including Ahmedabad), and Zomato’s food delivery is currently live in 15 cities in India. It claims to have over 9000 restaurant partners live on its platform. For the month of July, Zomato surpassed 3 million online orders, also reported food ordering revenues of $9 million for the financial year ended 31st March 2017 (FY17), around 8 times of FY16. Swiggy’s claims to stand ahead of Zomato with 4 million orders per month.