Online cab aggregator, Ola, has re-entered food delivery space with the acquisition of Foodpanda India from the parent firm Berlin-based food delivery marketplace Delivery Hero Group. The amount involved in the deal is still undisclosed.
According to a credible source, the deal is estimated to have valued Foodpanda in range of $30-40 million. The parent company will receive stock in Ola as part of the transaction. Following the deal, the ride-hailing firm said it will commit an investment of $200 million into the food delivery business.
Saurabh Kochhar, who was heading India operations for Foodpanda India will move out of the company and Pranay Jivrajka, the founding partner at Ola, has been appointed as interim CEO of this business unit. He will be working with the existing management of Foodpanda India.
This is not the first time ride-hailing firm has entered food delivery space, the cap-hailing platform earlier shut down its food delivery platform Ola Cafe.
“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 $200 million in Foodpanda India will help the business be focused on growth by creating value for customers and partners. 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 Bhavish Aggarwal, co-founder, and CEO, Ola.
Ola rival, Uber recently has been aggressive in its move to push UberEats in the space. The company claims to do around two million rides per day. The firm is aggressively expanding after it closed a $1.1 billion funding round led by Tencent and SoftBank in October.
Earlier, DeliveryHero acquired Foodpanda from Rocket Internet in Dec 2016, majorly to extend its food-ordering business into Asia, the Middle East and parts of Eastern Europe.
“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. Foodpanda India, boasts of 12,000 restaurant partners in over 100 cities.
Foodpanda fights bigger rivals like Zomato and Swiggy in the domestic market and has slipped to number three slot after being a dominant player in the years preceding 2015.