Months after acquiring a food delivery platform Foodpanda, in a distress sale, ride-hailing firm Ola is still to make any noise in the food delivery space. Though Ola might not have delivered much even after pumping in $200 million into its newly-acquired entity, it hasn’t abandoned the plan in the food delivery segment.
Foodpanda is now planning to acquire a Mumbai-based food delivery startup Holachef in a distress sale. The platform has stopped operations nearly three months ago. If the deal materialises, Foodpanda will acquire Holachef’s staff, brand name and kitchen equipment.
The three-year-old Mumbai-based food platform had raised a total of $9.6 million from the likes of Ratan Tata, Kalaari Capital and venture capital fund India Quotient. In February this year, it raised ₹ 2 crore from diamond merchant Ashok Kumar Gajera.
The recent shutdown of Holachef reflects poorly on the food delivery space where the sustainability factor has become crucial and startups are failing even after raising heavy funds from investors.
Last week, Bluechip angels and Tracxn-backed foodtech startup Twigly stopped operations in the capital.
Since 2016, many startups including TinyOwl, Eazymeals, BiteClub, Dazo and most recently Yumist and MonkeyBox had closed down as raising funds and figuring unit-economics became tough.
Zomato and Swiggy are the two main companies in India which have also raised millions of dollars from the Chinese Internet conglomerates. While Zomato had gobbled $200 million from Alibaba’s Ant Financials, Swiggy had recently raked in $210 million in a Series G round from Naspers, DST Global, Coatue Management and Meituan-Dianping.
Amidst this, Ola is trying to make a place in the segment where biggies like Swiggy and Zomato have captured the most space; the recent entrant Ubereats is working to fit itself in between.
Experts, however, say that to create an impact in the segment Ola will have to offer heavy discounts and ensure continuous cash infusion to create a winnable position for Foodpanda.
The development was first reported by Mint.