Neither of the companies has announced what the deal is worth, but reports claim that it is likely to be a ‘stock-based acquisition at under $50 million’. Ola has however committed to invest a further $200 million as it readies to take on immediate rival UberEATS, and incumbent players like Zomato and Swiggy.
“I’m excited about our partnership with Delivery Hero as we team up to take Foodpanda India to the next level. As one of India’s pioneers in the food delivery space, Foodpanda has come to be a very efficient and profit focused business over the last couple of years,” Bhavish Aggarwal, co-founder and CEO at Ola said. “Our commitment to invest $200 million in Foodpanda India will help the business be focused on growth by creating value for customers and partners.”
Post the acquisition, CEO of Foodpanda Saurabh Kochhar has left the company. In the meantime, founding partner Pranay Jivrajka has been appointed as the interim CEO of Foodpanda. “I also thank Saurabh Kochhar for building a wonderful team at Foodpanda India over the last couple of years and wish him the very best in his new endeavors,” Aggarwal added.
In October, Ola raised $1.1 billion in funding from the likes of SoftBank, Tencent and others. Banking on this investment, the company has bought what is considered to be the third-largest player in the food delivery business in India.
While it is clear Ola is looking at diversifying its range of services, this is not the first time the company has ventured into the food delivery space. Back in 2015, the company had launched Ola Cafe, but the venture never really picked up.
This time around, Ola will be able to leverage Foodpanda’s brand and reach. The food delivery service claims to have around 12,000 restaurant partners in over 100 cities. It will be interesting to see how the likes of Uber, Zomato and Swiggy react to this acquisition.