Tue. Mar 19th, 2024
Foodpanda India

In an unexpected move, India’s homegrown cab-hailing service provider Ola has announced that it has acquired food-tech startup Foodpanda India in an all-stock deal from its parent company Delivery Hero. The company has not revealed financial details related to this deal.

Saurabh Kochhar, CEO of Foodpanda India has decided to move on and will not continue with the company. Foodpanda India will now be headed by Ola’s founding partner Pranay Jivrajka, the company said in a press statement.

Apart from the acquisition, Ola has also announced that it will further invest around ₹1,281 crore ($200 million) in the Foodpanda India business.

Commenting on this, Niklas Östberg, Chief Executive Officer and Co-founder of Delivery Hero AG, said,

The partnership with Ola will allow us 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. The 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.

Bhavish Aggarwal, Co-founder and CEO at Ola, said,

I’m excited about our partnership with Delivery Hero as we team 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. Our commitment to invest $200mn in Foodpanda India will help the business be focused on growth by creating value for customers and partners.

This is the second attempt from Ola to enter into the food-tech space. Earlier, in 2015, the company forayed into the food-tech space with a service named Ola Cafe, and started operations in Delhi, Mumbai, Bengaluru, and Hyderabad. However, it discontinued the service after a year as the company failed to meet targets.

It seems that Ola is looking to expand its business after it raised around $1.1 bullion in a funding round a couple of months ago, which was led by China-based Tencent and Japan-based SoftBank. It also seems that the company is looking for ways through which it can differentiate itself from Uber’s Indian business.

Meanwhile, Uber has started focusing on its meal order and delivery platform UberEATS in India since May this year. Currently, the service is available in six cities, according to a company press release last week.

While Uber and Ola have established themselves as leaders in the online ride-hailing space in India, it will be interesting to see how they manage in the food-tech space, which is being dominated by Zomato and Swiggy.

By Jeet