Ola Suspends Food Delivery Biz of Foodpanda, Lay-off Employees

Ola has suspended food delivery business of Foodpanda, which the cab aggregator acquired in 2017, reported LiveMint. Ola has even laid off about 40 mid- to entry-level employees and terminated the contracts of most of its 1,500 food delivery executives, said the report citing four people aware of the development and confirming the report.

For last couple of months, Ola is reportedly struggling to keep the Foodpanda business afloat as the established specialty players such as Swiggy, Zomato and Ubereats have already acquired a major portion of the market.

According to the report, Ola wants to shift its focus from food delivery from restaurants to its own brands and in-house cloud kitchen business, which it launched after Foodpanda acquired Holachef, a Mumbai-based food-tech startup, in October last year.

Ola has launched a few brands and is considering the launch of a few more. Under its cloud kitchen business, Foodpanda currently owns three private label brands - The Great Khichdi Experiment, Lovemade and FLRT.

The report quoted one of its sources, "They (Ola) have realized they can’t burn money like Swiggy and Zomato, which is why they only want to do in-house brands. Over the last few months, Foodpanda has been scaling down its marketplace."

Following the suspension of Foodpanda, Ola is now in talks with delivery firms such as Dunzo and Zomato to re-list its cloud kitchen brands. It wants to focus only on running the cloud kitchen brands instead of a food delivery business, the report said.

In the last two weeks alone, Ola has dissolved the ground team of Foodpanda completely. While Ola has retained its core operations team having senior employees, the entry-level employees were given pink-slips which then was followed by lay-off of on-ground operations team. Notably, it was Ola founder and CEO Bhavish Aggarwal who supervised the staffing of executives at Foodpanda post its acquisition.

In 2015, Ola had tried its hands on food delivery business with Ola Cafe, where customers could order through the app and Ola cabs would deliver the order in quick time. However, within a year later the company had to shut down the service on account of stiff competition from Swiggy and Zomato.

In the same year, Ola also tried to diversify its business by adding online grocery delivery service to its offerings by launching 'Ola Store' in July 2015

Last year in May, it was reported that Ola's parent ANI Technologies Pvt. Ltd was setting up a holding company that will own different business units, including its core cab business, food delivery app Foodpanda and the nascent businesses of electric vehicles (EV) and the international unit.

Ola-owned Foodpanda Acquires Shut Down Foodtech Firm Holachef

Foodpanda, the Ola-owned online food ordering and delivery startup, has acquired Mumbai-based foodtech startup Holachef Hospitality Pvt. Ltd, which had shut down operations in July-August this year, for an undisclosed amount.

Foodpanda will take over Holachef’s employees and kitchen equipments. Founders of Holachef, Anil Gelra, Gaurav Srivastava and Saurabh Saxena, will join the leadership team at Foodpanda.

The acquisition however is believed to bring bring no returns to its investors of Holachef, which include InnoVen Capital, Kalaari Capital, India Quotient, SIDBI Venture Capital and Ratan Tata. Holachef raised a total of $9.6 million in funding over eight rounds since 2015. The last funding raised by Holachef was in February this year when it raised Rs.20 lakhs in Series B round.

A media report in Augst has suggested that Kalaari Capital and India Quotient had already resigned from the board of directors of HolaChef earlier this year.

HolaChef acquisition comes within two months after Mumbai-based on demand delivery firm Scootsy was acquired by food delivery firm Swiggy, which is Foodpanda's biggest rival in India besides Zomato.

Notably, Holachef is Ola’s second acquisition within a year, since it had bought Foodpanda from Germany’s Delivery Hero in December last year.

HOlaChef was founded in 2015 by Saurabh Saxena, Anil Gelra and Gaurav Srivastava. Essentially, HolaChef used to curates chefs ranging from executive chefs to amateurs and allows them creative freedom through their signature dishes. Before shutting its operation three months back, the company was managing the logistics of the food (packaging, storage & delivery).

[caption id="attachment_126758" align="aligncenter" width="620"] HolaChef Founders (L-R)- Saurabh Saxena & Anil Gelra
Image - BusinessStandard.com[/caption]

With this acquisition, Foodpanda will foray into cloud kitchens and also plans to launch its own food brand across categories. The company claims to have a network of over 1 lakh delivery partners and access to over 150 million customers.

“We aim to build India’s largest cloud kitchen network that will be a major step in further elevating the food experience for our customers,” said Pranay Jivrajka, chief executive at Foodpanda. “I am delighted to welcome the Holachef team on board and look forward to their joining us in our mission of delivering superior food experiences to a billion Indians.”

"We are delighted to join hands with Foodpanda to accelerate our mission. We are thrilled to be part of Foodpanda’s and Ola’s passionate team that is truly changing the food experience for a billion Indians,” said Saurabh Saxena, co-founder and chief executive at Holachef.

Meanwhile, an another online food delivery player, FreshMenu is reportedly in talks to raise $25-30 million from new and existing investors.

Ola-owned Foodpanda Acquires Shut Down Foodtech Firm Holachef

Foodpanda, the Ola-owned online food ordering and delivery startup, has acquired Mumbai-based foodtech startup Holachef Hospitality Pvt. Ltd, which had shut down operations in July-August this year, for an undisclosed amount.

Foodpanda will take over Holachef’s employees and kitchen equipments. Founders of Holachef, Anil Gelra, Gaurav Srivastava and Saurabh Saxena, will join the leadership team at Foodpanda.

The acquisition however is believed to bring bring no returns to its investors of Holachef, which include InnoVen Capital, Kalaari Capital, India Quotient, SIDBI Venture Capital and Ratan Tata. Holachef raised a total of $9.6 million in funding over eight rounds since 2015. The last funding raised by Holachef was in February this year when it raised Rs.20 lakhs in Series B round.

A media report in Augst has suggested that Kalaari Capital and India Quotient had already resigned from the board of directors of HolaChef earlier this year.

HolaChef acquisition comes within two months after Mumbai-based on demand delivery firm Scootsy was acquired by food delivery firm Swiggy, which is Foodpanda's biggest rival in India besides Zomato.

Notably, Holachef is Ola’s second acquisition within a year, since it had bought Foodpanda from Germany’s Delivery Hero in December last year.

HOlaChef was founded in 2015 by Saurabh Saxena, Anil Gelra and Gaurav Srivastava. Essentially, HolaChef used to curates chefs ranging from executive chefs to amateurs and allows them creative freedom through their signature dishes. Before shutting its operation three months back, the company was managing the logistics of the food (packaging, storage & delivery).

[caption id="attachment_126758" align="aligncenter" width="620"] HolaChef Founders (L-R)- Saurabh Saxena & Anil Gelra
Image - BusinessStandard.com[/caption]

With this acquisition, Foodpanda will foray into cloud kitchens and also plans to launch its own food brand across categories. The company claims to have a network of over 1 lakh delivery partners and access to over 150 million customers.

“We aim to build India’s largest cloud kitchen network that will be a major step in further elevating the food experience for our customers,” said Pranay Jivrajka, chief executive at Foodpanda. “I am delighted to welcome the Holachef team on board and look forward to their joining us in our mission of delivering superior food experiences to a billion Indians.”

"We are delighted to join hands with Foodpanda to accelerate our mission. We are thrilled to be part of Foodpanda’s and Ola’s passionate team that is truly changing the food experience for a billion Indians,” said Saurabh Saxena, co-founder and chief executive at Holachef.

Meanwhile, an another online food delivery player, FreshMenu is reportedly in talks to raise $25-30 million from new and existing investors.

Naspers Increases Stake in Foodpanda Parent Delivery Hero

Delivery Hero, the leading global online food ordering and delivery marketplace, has announced that Naspers increased its stake in Delivery Hero from 10.6 percent to 23.6 percent by acquiring 22,359,857 shares that were previously held by Rocket Internet for an amount of $775M.

Naspers is one of the largest internet investors in the world, holding minority stakes in digital players such as Tencent, Mail.Ru or Flipkart.

Niklas Östberg, CEO of Delivery Hero, said, “We know the Naspers management team for a couple of years and built very close and trustful relationships. They came in as a long-term shareholder, committed to Delivery Hero, committed to the vision and values of our company and management team. We are excited about their willingness to increase their stake as they have seen our business develop.”

Bob van Dijk, CEO of Naspers, said, “Delivery Hero is already the leading online food ordering and delivery marketplace in most of the countries in which it operates and our increased investment demonstrates our confidence in the long-term prospects for the company. The food delivery sector is still underpenetrated and growing rapidly across the world. Many markets have experienced significant traction already, but we believe the potential is far greater in high-growth markets than that observed in the West.”

The transaction is subject to regulatory approval, will be funded from existing resources, and is expected to close in the first quarter of 2018.

Delivery Hero is the leading global online food ordering and delivery marketplace with number one market positions in terms of restaurants, active users and orders in more countries than any of its competitors and online and mobile platforms across 40+ countries in Europe, the Middle East & North Africa (MENA), Latin America and the Asia-Pacific region. Delivery Hero also operates its own delivery service primarily in 60+ high-density urban areas around the world. The Company is headquartered in Berlin and has over 6,000 employees in addition to thousands of employed delivery drivers.

Anatomy Of Foodpanda's Acquisition Of JustEat India

In an all-stock deal, Rocket Internet-backed Foodpanda bought food ordering portal JustEat India. This is one of seven food delivery start-ups Foodpanda bought across Asia, a move aimed at strengthening its presence in India. Renouncing its majority stake in its India entity in November 2013 to 49.9 percent; UK-based JustEat will acquire an undisclosed stake in the combined Indian entity, which will be India's largest food-ordering provider with a presence in more than 200 cities across 12,000 restaurants. In exchange to the sale, Just Eat receives a minority holding in Foodpanda.in with the latter assuming full ownership of JustEat India.

Foodpanda has raised at least 100 million dollars since its launch in 2012 whereas Zomato, launched in 2008, has raised close to 113 million dollars and is expected to leverage its listings of about 50,000 restaurants in India by building its own ordering platform globally and is posing the biggest challenge to Foodpanda.

In a deal estimated to be between 15-20 million dollars in November last year, FoodPanda acquired TastyKhana. After acquiring City Delivery in Philippines, Room Service in Malaysia, Koziness in HongKong and Eat Oye in Pakistan as part of a larger Asia strategy, Foodpanda is looking to operate JustEat India as a separate company for the time being.

"These are exciting times for us. There has been a tremendous response to our brand and service, and with this acquisition. JustEat had a very strong play in the South Indian market. Where we operate in the world, our aim is to be the undisputed leader in that country. This buyout is geared towards that strategy," co-founder and managing director, Foodpanda, Rohit Chadda, said. He also added that "The company may not look at more acquisitions in the country now, as it sees no other significant players in the market."

JustEat, TastyKhana and Foodpanda are likely to be merged under a single entity in India, according to a source aware of the group's plans.

"The larger idea behind consolidation in various markets by Rocket Internet is to have an IPO for its food-delivery business, which may be valued at between $2 billion and $2.5 billion next year," said a person familiar with the group's plans.

The online food services market is valued at over $14 billion (about Rs 86,600 crore) in India and $371 billion globally.

FoodPanda Acquired Its Biggest Competitor TastyKhana

Rocket Internet-backed food delivery service FoodPanda has acquired its biggest competitor in India, TastyKhana which is another online food-delivery service that partners with 10,000 restaurants in 173 cities, in India and is backed by Delivery Hero. Interestingly, Foodpanda and Delivery Hero are acquiring companies from each other in India, Mexico, and Latin America.

Germany-based Delivery Hero, the lead investor in TastyKhana, had invested $5 million in the venture in 2013.

The financials of the investment are not yet disclosed but is believed to be a mix of cash and stock payout, however, ET has reported that Delivery Hero might have earned returns of between $15 million and $25 million (Rs 93-155 crore).

The deal sees Delivery Hero exiting the Indian food services market, which is valued at about $14 billion, as well as other emerging geographies, and focus more on growth markets such as Latin America and Europe, among others.

This is the second buyout in India's fast burgeoning online food ordering space, following Mumbai-based digital media and consumer internet incubator Ant Farm's acquisition of Meals on Wheels last week.

Founded in 2007 by Shachin Bharadwaj and Sheldon D'souza, TastyKhana has tied up with a number of leading food and beverages brands.

Foodpanda is currently available in 38 countries, while Delivery Hero operates in 23 countries.

Along with Tastykhana, Foodpanda has acquired 3 more companies which were backed by Delivery Hero whereas Delivery Hero purchased businesses in Argentina, Chile, Colombia, Ecuador, and Peru from hellofood, a brand affiliated with Foodpanda.