Ola to Acquire Foodpanda’s India Unit, Pump in $200 Mn
Cab hailing app Ola on Tuesday, 19 December, said it will acquire Foodpanda's India business from Germany-based Delivery Hero Group in exchange of its stock.
Besides, the SoftBank-backed company has committed investments to the tune of US $200 million in the Foodpanda India business, which is the largest such infusion of funds in an Indian online food ordering and delivery company till now.
Under the deal, Foodpanda's India business will be transferred to Ola in exchange of the latter's stock, Ola said in a statement.
It, however, did not divulge details about the number of shares that will be part of the transaction.
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In 2014, Ola had forayed into the food delivery business with Ola Cafe and had expanded the offering to cities like Delhi, Mumbai and Bengaluru. However, Ola Cafe was later shut down.
According to industry sources, the Softbank-backed Ola had been working on getting back into the food delivery business to compete against UberEATS and that the acquisition of FoodPanda India is a step in that direction.
The sources did not wish to be identified as the discussions are private. Ola did not comment on the matter.
Ola said Foodpanda India will benefit from its scale and efficiencies as a platform and it will continue to collaborate with Delivery Hero on building the online food delivery ecosystem in India.
Saurabh Kochhar, who was the CEO of Foodpanda India until recently, has decided to move on to pursue other opportunities.
Ola Founding Partner Pranay Jivrajka has been appointed as interim CEO of this business unit, supported by the existing leadership team at Foodpanda India.
Niklas Östberg, Chief Executive Officer and co-founder of Delivery Hero AG, said the partnership will allow it to further consolidate markets.
Foodpanda India’s revenue stood at Rs 62.16 crore in 2016-17 compared to Rs 37.81 crore in the previous fiscal, on the back of strong growth in orders in key markets.
Its losses to declined by 69 percent to Rs 44.81 crore in 2016-17, from Rs 142.64 crore in 2015-16. The company had said it aims to be profitable by 2019.