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Cab aggregator Ola will acquire Foodpanda India from Germany based online food ordering and delivery marketplace Delivery Hero in an all-stock deal that will see the ride-hailing firm invest $200 million into Foodpanda. While the companies did not disclose the details of the deal size, sources have pegged the stock-based acquisition at under $50 million.
“Foodpanda has come to be a very efficient and profit-focused business over the last couple of years,” Bhavish Aggarwal, co-founder and CEO of Ola said. He further added, “Our commitment to investing $200 million in Foodpanda India will help the business to be focused on growth by creating value for customers and partners.” Ola said, "Saurabh Kochhar, who was the CEO of Foodpanda India until recently has decided to pursue other opportunities." Pranay Jivrajka, Founding Partner, Ola will take on the business as interim CEO.
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. An analyst told Economic Times, “The $200 million investment in Foodpanda is not a very high figure, so Ola has made a significant entry into acquiring a sizable portion of the food delivery space through this move. Through this deal, it will easily take on UberEats, which is also failing to pick up traction for varied reasons, from customer stickiness to high restaurant commission charges at 30 percent."
“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 Ostberg, CEO, and Co-founder of Delivery Hero.