Uber’s biggest rival in India Ola announced to acquire Foodpanda India from its parent company Delivery Hero in an all-stock deal.
Under the deal, the ride-hailing company will scoop up the Foodpanda India business in exchange for an undisclosed amount of its stock taken by Delivery Hero, according to the press note.
The announcement further said that Ola, operated by ANI Technologies Pvt. Ltd will invest $200 million in Foodpanda India. Moreover, Saurabh Kochhar, Foodpanda’s CEO will leave his place and Pranay Jivrajka, Ola’s founding partner will take his place as interim CEO.
The acquisition deal comes months after Ola raised $1.1 billion from investors including Softbank Group and Tencent Holdings. The Bangaluru-based company aims to expand its business and gain lead upon Uber’s Indian unit.
The San Francisco based Uber launched its UberEATS project in India in the month of May and has grown its service to 7 cities since then. Ola also started Ola Cafe in 2015 which was shuttered down after months. It’s kind of a dog eat dog situation between both the companies that tend to acquire dominance.
Foodpanda currently has 15,000 restaurant partners across 100 cities. Bhavish Aggarwal, co-founder and CEO of Ola said in a statement that the $200 million fund will be focused at growing the business further. He added that his company plans to take the Foodpanda business to the next level.
Germany based Delivery Hero acquired Foodpanda from Rocket Internet in December last year in an attempt to strengthen its global leadership position by extending its business into Asia, Middle East and parts of Eastern Europe. Delivery Hero went public at a valuation of more than $5 billion in June.
Delivery Hero, which never discloses country-specific business figures, revealed that revenue from Asia was at €35.5 million, Europe at €48.6 million and the Middle East at €41.8 million.
“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.
Ola, by acquiring Foodpanda India will enter the crowded online food delivery space, dominated by local giants Swiggy, Zomato and international giants UberEATS and Google’s Aero.