Ola acquires Foodpanda India from Delivery Hero, to invest $200 million
New Delhi: Ola, operated by ANI Technologies Pvt. Ltd, has acquired online food delivery start-up Foodpanda India from its German parent Delivery Hero AG in an all-stock deal that will see the ride-hailing firm infuse $200 million in Foodpanda India’s operations.
Under the deal, Foodpanda’s India business will be transferred to Ola in exchange for the latter’s stock. The share-swap arrangement and details of the transaction were not disclosed.
The deal marks Ola’s foray into the online food ordering and delivery segment, a business shaped in India by the likes of Zomato and Swiggy, and one where Ola’s biggest rival, Uber Technologies Inc., has been making strides through its unit UberEATS. Ola too tested what it called Ola Cafe in 2014, but shut down the unit shortly after.
The collaboration between Ola and Foodpanda India unlocks the power of a partnership that will help Foodpanda India grow as the most preferred online food delivery service in the country, Ola said in a statement Tuesday.
“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,” said Bhavish Aggarwal, co-founder and chief executive at Ola.
The ride-hailing firm also announced the departure of Saurabh Kochhar, who headed Foodpanda India as its CEO until recently. Pranay Jivrajka, a founding partner at Ola, will be the interim CEO of the business unit.
The deal comes months after Bengaluru-based Ola raised $1.1 billion (about Rs7,000 crore) from SoftBank Group and Tencent Holdings to strengthen its position in India.
Another $1 billion is likely to come in soon.
Mobility start-ups with terabytes of data on local routes and consumer app usage patterns are generally believed to be better placed in running a delivery business. In 2014, San Francisco-based Uber launched UberEATS as a pilot project and has since taken the service to 27 countries—and seven Indian cities in quick succession since May this year.
Foodpanda India was set up as the local unit of Berlin-based Foodpanda GmbH, a Rocket Internet portfolio firm, in 2012. The company has had a tough stint in India, given service quality issues, layoffs and ceding of market share to rivals.
From the archives: The trouble with Foodpanda
Last year, Delivery Hero acquired Foodpanda GmbH but the deal did not have a substantial trickle down impact on India operations, Foodpanda India’s Kochhar had said in an interview with Mint.
With this deal, both Ola and Delivery Hero have hinted at a more collaborative partnership.
“The partnership with Ola will allow us to further consolidate markets where it strategically makes sense to collaborate with leading local players. At the same time, we consider our stake in Ola as a very valuable asset, while Ola’s investment commitment in Foodpanda India is a clear and confident signal to the Indian market,” said Niklas Östberg, chief executive and co-founder of Delivery Hero.