Ola has acquired Foodpanda India the food delivery startup from its parent in Germany Delivery Hero AG in a deal that is all-stock that will see the giant in ride-hailing inject $200 million in the operations of Foodpanda India.
Under this deal, the Foodpanda India business would be transferred to Ola in exchange for the stock. The share swap deal and details of this transaction were not released.
The deal starts Ola’s foray into ordering and delivery of food online, a business that is shaped in India by Swiggy and Zomato, and one in which the biggest rival of Ola, Uber, had made huge strides of recent through UberEats, its own food delivery unit.
Ola tested its own Ola Café during 2014, but shut it down shortly thereafter.
The Ola and Foodpanda India collaboration unlocks the power through partnership that will be helpful to Foodpanda India to grow as the most preferred online delivery service for food in the South Asia country, said Ola in a prepared statement on Tuesday.
The CEO and co-founder of Ola Bhavish Aggarwal said the commitment of Ola to make an investment of $200 million in Foodpanda India is going to help the company focus on growth through creating value for partners and customers. With the global leadership of Delivery Hero and the platform capabilities with local insights of Ola, the partnership comes to live with strength, added the Ola CEO.
The ride-hailing company also made an announcement that Saurabh Kochhar, who was the head of Foodpanda India at CEO until just recently has departed. Pranay Jivrakja a founding Ola partner will take on the responsibilities of interim CEO of its business unit.
This deal arrives months after Ola, based in Bengaluru, raised over $1.1 billion from Softbank and Tencent Holdings to help strengthen its position across India.
In 2014, Uber, based in San Francisco, launched its UberEATS. The then-pilot project has since become a service across 27 different countries and seven cities in India since just May of 2017.
Foodpanda India was established as a local unit of Foodpanda GmbH, which is based in Berlin and a Rocket Internet portfolio company, in 2012.
It has been difficult for the company in India, given quality of service issues, layoffs, and loss of market share to its rivals.
In 2016, Delivery Hero took control of Foodpanda GmbH but that deal had little trickle-down effect in India operations.