BackFoodpanda raises $100 million in round led by Goldman Sachs
The company will use the recent investment to further expand its delivery activities and improve overall customer experience across its 40 markets
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New Delhi: Global online food delivery marketplace Foodpanda said on Friday that it had raised $100 million of fresh funds from investors led by hedge fund Goldman Sachs Investment Partners, less than two months after investors infused $110 million into the company.
Existing investors, including Rocket Internet, also took part in the funding.
“It is our expectation that the company’s innovative, value-added offerings will lead Foodpanda to be the winner in online food delivery within the markets in which it operates," said Ian Friedman, vice-president at Goldman Sachs Investment Partners, who will join the advisory board of Foodpanda as part of the financing round.
Although Foodpanda does not earmark funds by region, a bulk of this money is expected to come to India, which is one of the largest markets for Foodpanda globally, said Saurabh Kochhar, chief executive of the company’s Indian unit and chief business officer of global operations.
India and Russia are the two largest markets for Foodpanda by the number of orders it gets. Although India still contributes a small portion to global revenue, it is among the top five markets, Kochhar said.
The company will use the money to expand its delivery and improve the customer experience across its 40 markets. In March, Foodpanda had raised $110 million, largely from Rocket Internet. The company has raised over $310 million since its launch in 2012.
“We want to grow the business to at least five times its current size during the next one year," added Kochhar. The company, which currently has 500-600 people delivering food in India, will add another 2,000-2,500 by March 2016.
Investors see a potentially lucrative opportunity in food delivery start-ups that offer the advantages of easy accessibility and convenience to their customers, just like online taxi hailing companies Uber and Ola have transformed the taxi market.
Smaller companies operating in the hyper-local food delivery space such as TinyOwl and Swiggy are attracting investor interest too. TinyOwl, founded in 2014, has raised $20 million from Sequoia Capital, Nexus Venture Partners and Matrix Partners so far. According to data analytic firm Tracxn, the food ordering and delivery space across in India has attracted close to $19 million in 2015.
In April, restaurant discovery portal Zomato, which recently ventured into food ordering, raised $50 million from existing investor Info Edge (India) Ltd.
Globally the food ordering and delivery space saw investors pump in over $220 million in 2014 and 2015.
US-based DoorDash, a two-year-old on-demand food delivery company, raised $40 million from investors including venture capital firm Kleiner Perkins and Sequoia Capital. Chinese food ordering company Daojia, too, has raised $50 million since it started in 2010.
“Food is currently the sunshine sector and private equity investors are getting very interested in this space," said Rachna Nath, a partner at consulting firm PricewaterhouseCoopers. “These companies are trying to solve the problems of last mile connectivity and how a restaurant interacts with its customers."
During the last one year, Foodpanda acquired key competitors in India such as TastyKhana.in and JustEat.in for undisclosed amounts. The company also made acquisitions in Mexico, Russia, Brazil, Eastern Europe, the Middle East and Asia.
“The emerging markets represent the largest opportunity in online food delivery and we are committed to create the most convenient way for ordering and delivering food," said Ralf Wenzel, co-founder and chief executive officer of Foodpanda Group.
Foodpanda is active in 580 cities around the world, operating in 12 of the largest 20 metropolises, and partnering with over 60,000 restaurants.
“Last-mile delivery has been part of Foodpanda’s operations since the beginning. It will now accelerate its efforts to drive customer satisfaction, aiming to offer the most convenient way of ordering food—from the mobile app and online," the company said in a statement.
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