Two months after the speculations of Foodpanda acquiring Holachef, the Ola-owned foodtech company has finally acquired the Mumbai-based food delivery startup on World Food Day.
The financial details of the deal has not been disclosed, however, industry experts believe that the acquisition is a distress sale. The acquisition would pave the entry of Foodpanda into cloud kitchen segment.
According to Foodpanda, Holachef’s founders will join the company’s leadership team and it will absorb Holachef’s employees, business including kitchens, and equipment.
HolaChef, which halted its operations in May, has raked in over $9.6 million from the likes of Ratan Tata, Kalaari Capital and India Quotient.
The acquisition seems to be part of Foodpanda aggressive expansion plans since capital infusion from its parent company.To spruce up delivery capability, it has been hiring aggressively. Recently, it claimed to have on-boarded 125,000 delivery partners.
While Zomato and Swiggy boast monthly delivery mark in the range of 20-21 million, Foodpanda is slowly but increasing its presence and monthly delivery volume through massive discounts and well-targeted campaigns.
As far as cloud kitchen business is concerned, Zomato had given up the segment and Foodpanda will have to climb up a long wall to match its rival Swiggy. The Naspers-backed foodtech Unicorn expects 25 per cent revenue from the virtual kitchen business–Swiggy Access.
Unlike aggregating menu of third-party restaurants, cloud kitchen offers handsome margin in the range of 25 to 30 per cent. Since food delivery companies are bleeding profusely, cloud kitchen can help them to improve unit economics and cover up mounting losses.