The Indian ride hailing firm, Ola has acquired the Indian Division of food delivering service, Foodpanda for an undisclosed equity stake. The deal states that Pranay Jivrajka, a founding partner of Ola, will be staying on as the Interim Chief Executive Officer of the Foodpanda India Unit, while the current CEO of the company’s India operations, Saurabh Kochhar will move on to other opportunities.

Those close to the deal have stated that Ola, currently headquartered in Bengaluru, will be investing $200 million (approximately Rs 1300 crore) into Foodpanda’s Indian delivery business, stating that this investment is likely to be the single largest cash injection into the Indian digital food ordering and delivery sector. “Our commitment to invest $200 million in Foodpanda India will help the business be focused on growth by creating value for customers and partners. With Delivery Hero’s global leadership and Ola’s platform capabilities with unique local insights, this partnership is born out of strength,” said Bhavish Aggarwal, co-founder and chief executive officer (CEO) of Ola, in a statement.

This deal marks Ola’s second attempt at the On-demand food delivery market . The company had exited the market last year , when it had to shut down its pilot Ola Café (launched in 2015) due to an unimpressive performance and stiff competition from other contenders like Swiggy, Tinyowl, and Zomato.

Foodpanda’s global operations were sold by Rocket Internet to its biggest rival, Delivery Hero in December of last year. The sale was a result of the fallout that Indian food startups faced in that year, with a number of them shutting down operations. Delivery Hero will continue to collaborate with Ola, in order to build Foodpanda’s operations in India. The investment will enable Foodpanda to take on competitors like Swiggy and Zomato.

For Ola, the deal will open up a channel to Rocket Internet, one of the top prolific venture capital investors in Europe. “The partnership with Ola will allow us to further consolidate markets where it strategically makes sense to collaborate with leading local players. 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,” said Niklas Östberg, co-founder and CEO of Delivery Hero.
In terms of scale, Foodpanda is one of the top three food ordering platforms in India and combined with Ola’s logistical advantages, Foodpanda could become a serious competitor for Zomato and Swiggy.

(Picture courtesy: HungryForever)