Indian online cab service, Ola struck a deal with the food delivery app Foodpanda to add a new product to its portfolio and counter Uber’s food venture, UberEats. The cab aggregator took over the Indian business of Foodpanda from the Germany-based parent Delivery Hero Group.
Commenting on the deal Bhavish Aggarwal, co-founder and CEO at Ola said, “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”.
New Venture-New Start for Ola
Neither of the two parties revealed the amount exchanged for the deal, however, reports suggest that it was a ‘stock-based acquisition at under $50 million’. Meanwhile, Ola is committed to investing $200 million in Foodpanda India that will help them make a focused growth by creating value for customers and partners.
Ola has been trying to get into the field of food delivery business, and Foodpanda isn’t its first attempt. If you recall that in 2015 Ola started Ola Cafe, which was their in-house food delivery business, but unfortunately, it didn’t work very well for them.
This second innings could be a game changer for Ola. The Foodpanda is an established brand that brings around 12,000 restaurant partners in over 100 cities to the table.
Whatever future this new venture beholds, the going isn’t easy for both firms. It will get competition from its immediate rival UberEats and market leaders Zomato and Swiggy. They will make it tough for Ola, who has a market value of around $7 billion, to have a successful business with Foodpanda, whose market valuation this summer was at $5 billion.