Indian ride-hailing service Ola has agreed to buy the local operations of food delivery start-up Foodpanda in an all-stock deal, seeking to fend off the dominance of rival Uber Technologies' Uber Eats in the south Asian country.
Saurabh Kochhar, the current CEO of Foodpanda India, has chose to move on, the release said.
Popular ride-sharing app and Uber's closest rival Ola has proclaimed its debut in India's food space. The company had recently announced a tie-up with Zomato to enable food via from its in-car Ola Play platform. "Our commitment to invest $200 million in Foodpanda India will help the business be focused on growth by creating value for customers and partners", said Bhavish Aggarwal, co-founder and CEO, Ola. "With Delivery Hero's global leadership and Ola's platform capabilities with unique local insights, this partnership is born out of strength".
"Saurabh Kochhar, who was the CEO of Foodpanda India until recently, has made a decision to move on to pursue other opportunities", Ola said in a statement. However, on the other end, Ola's biggest rival in the country, Uber is making consistent progress through its unit UberEATS, which now active in 27 countries including 7 Indian cities.
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This is the second attempt from Ola to enter into the food-tech space. The competition has been intense in the segment with the likes of Zomato and Swiggy competing aggressively to capture the market.
Foodpanda, previously owned by Germany's Rocket Internet, was sold to its larger rival Delivery Hero, last year, after the German firm chose to reshuffle its portfolio of businesses. In October, Ola closed a $1.1 billion funding round led by Tencent and SoftBank, after which it has been constantly looking forward to distinguishing itself from Uber's business in India.
I'm excited about our partnership with Delivery Hero as we team up to take Foodpanda India to the next level. But again this time Ola might get lucky as the online food delivery market in India is expected to grow more. For many, it makes ideal sense for Ola to acquire Foodpanda which has the market expertise and established user base than trying its hand and getting burned again with a similar attempt as Ola Cafe. Foodpanda India, which was mired in controversies around corporate governance, has about 15,000 restaurants in 100 cities listed on its platform.
While Ola will inherit a loss-making business from Delivery Hero, Foodpanda India has been able to cut its losses from Rs 142.63 crore in FY16 to Rs 44.81 crore in FY17.