Foodpanda raises Rs150 crore in one year
New Delhi/Bengaluru: Rocket Internet-backed food ordering firm Foodpanda’s India unit has raised over Rs.150 crore in the past year in eight different tranches from Berlin-based parent Jade Gmbh and Co., according to documents available with the registrar of companies.
The money has come in between July 2015 and June 2016.
Foodpanda is also looking to raise fresh funds, said Saurabh Kochhar, chief executive of the company, on Tuesday, adding it has roped in investment banker O3 Capital for the same.
He said that the fresh capital will be used in enhancing technology, infrastructure, delivery and for marketing activities.
The global online food delivery company had in May announced it had raised $100 million of fresh funds from investors led by hedge fund Goldman Sachs Investment Partners. The amount raised is expected to have come from the same fund. The firm, however, declined to clarify about the same.
The Times of India on Tuesday reported that Foodpanda is in talks to raise $40-60 million and may also opt for a sale. Kochhar has however declined any sale talks. He also stressed that the firm has been operationally profitable in India since February.
In September, Mint too reported Foodpanda Group could be looking to sell its Indian arm as the Rocket Internet-backed firm was revisiting its strategy in the country amid intense competition in the food-tech sector.
While Jabong has been acquired by Flipkart Ltd through its unit, Myntra, for $70 million in July, Fab Furnish was acquired by Kishore Biyani-led Future Group in April.
The size of the round was touted to be anywhere between Rs.15 crore and Rs.20 crore in cash.
Foodpanda (Pisces eServices Pvt. Ltd) competes with Indian rival Zomato Media Pvt. Ltd and Bengaluru-based Swiggy. Swiggy (Bundl Technologies Pvt. Ltd), raised Rs.230.34 crore in a Series C funding round in January. Existing investors such as SAIF Partners, Accel Partners, Norwest Venture Partners and Apoletto Asia Ltd together pumped in about Rs.181 crore in the round.
Zomato last raised $60 million from Singapore’s Temasek Holdings Pte and existing investor Vy Capital, valuing the company at about a billion dollars.
Meanwhile, Foodpanda, which has essentially been a food delivery platform, has also shifted from its core business and is exploring revenues beyond its current business of food delivery, Mint reported on Tuesday. It is partnering with e-commerce-focused logistics firm Ecom Express and will venture into delivering of e-commerce packets, a genre much different from its current expertise of food.
Foodpanda’s entry into e-commerce deliveries is targeted to bring in some additional revenue. At the same time, it will allow the company to utilize its delivery fleet during non-peak hours. The non-peak hours for food delivery firms are usually before noon and between 3pm and 7pm, when not much food ordering takes place.
Kochhar said a pilot for the e-commerce delivery will be launched in September in Delhi and Gurgaon. The company plans to expand the services to Hyderabad, Bengaluru and Pune if the pilot becomes a success. He, however, did not share the revenue expectation.
Food delivery firms maintain a fleet of delivery executives; a mix of people on their payrolls and those who come in at peak hours and are paid on the basis of the number of orders delivered.
Foodpanda has about 1,500 delivery personnel. Ecom Express, on the other hand, has almost 15,000 delivery boys with them round the year. However, most food delivery firms have been struggling with poor unit economics, as cost of delivery far exceeds revenue per delivery. Consequently, food delivery firms such as Foodpanda are exploring additional revenue sources to make the most of their fleet during non-peak hours.
According to industry experts, the average order value for food in the US is around $20, significantly more than the average Rs.300 in India. As a result, delivery firms in India which charge clients a commission of 10-20% of the order value end up losing money as every delivery costs more than Rs.50.
Foodpanda currently has 12,000 partner restaurants in India. On Tuesday, it also launched a quality compliance initiative for restaurants and said it will invest Rs.2-3 crore in the next one year on the same.