In exchange of the online transportation network company’s stock.
Online cab service provider Ola on Tuesday confirmed that it will be acquiring online food ordering and delivery company, Foodpanda’s India business from Germany-based Delivery Hero Group in exchange for its shares.
Furthermore, the SoftBank-banked company has also committed to invest $200 million in Foodpanda’s Indian business, till now the largest investment made in any Indian mobile food delivery marketplace.
In an official statement released on Tuesday, Ola stated that Foodpanda’s India business will be transferred to Ola in exchange for the online transportation network company’s stock. However, Ola has not yet revealed how many shares will be part of the latest transaction.
Earlier last year, Ola shut down its Ola Café after it faced tough competition from food delivery majors – Swiggy, Tinyowl and Zomato. Ola had forayed into the food delivery business with Ola Café in 2014 and expanded its food delivery service to cities like Delhi, Mumbai and Bengaluru. However, according to industry sources, after Ola’s business rival Uber unveiled UberEATS in India a few months ago, Ola’s plans to enter the food delivery business heated up again – and the acquisition of Foodpanda is a step towards it.
Without revealing much information on the recent deal, Ola said that Foodpanda India will be benefiting from its scale and efficiencies as a platform and will continue collaboration with Delivery Hero to build the online food delivery ecosystem in the country.
“I’m excited about our partnership with Delivery Hero as we team up to take Foodpanda India to the next level. Our commitment to invest USD 200 million in Foodpanda India will help the business be focused on growth…,” said Ola co-founder and CEO Bhavish Aggarwal.
“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,” added Niklas Östberg, Chief Executive Officer and co-founder of Delivery Hero AG
Ola’s Founding partner Pranay Jivrajkahas recently been appointed as the interim CEO of Foodpanda India – replacing former CEO Saurabh Kochhar, who decided to move out of the business unit to seek other opportunities.
With a steep rise in revenue – which stood at Rs 62.16 crore in 2016-17 compared to Rs 37.81 crore in the previous fiscal – Foodpanda is associated with over 15,000 restaurants across 100 Indian cities.