Ola to acquire Foodpanda India from Delivery Hero

Cab-hailing firm looking to pump $200m in the business

Cab-hailing firm Ola on Tuesday said it will acquire online food ordering company Foodpanda's India operations in an all share deal and will invest USD 200 million (over Rs 1,280 crore) in the business. Ola will acquire Foodpanda India from German parent Delivery Hero, the two companies said in separate statements, reports PTI. With Foodpanda, Ola will get over 15,000 restaurants in more than 100 cities on its roster. Saurabh Kochhar, the current CEO of Foodpanda India, has decided to move on, the statement said. The company will now be headed by Ola's founding partner Pranay Jivrajka. Delivery Hero will transfer Foodpanda's India business to Ola in exchange for Ola stock, the company statement added.

The German firm said the deal is part of its strategy to further build its leadership positions and consolidate markets. "The India business represents a small portion of Delivery Hero's overall business, contributing 1.9 per cent of total segment revenues for the first nine months of 2017. At the same time the equity stake in Ola will allow Delivery Hero to participate in the long term Indian food delivery opportunity," it said.

Foodpanda's revenue stood at Rs 62.16 crore in the 201617 fiscal, as compared to Rs 37.81 crore in the previous financial year, on the back of strong growth in orders in key markets. Its losses narrowed to Rs 44.81 crore in the 2016-17 financial year, from Rs 142.64 crore in 2015-16. The company had said it aims to be profitable by 2019. The acquisition would help Ola compete with rival Uber in the meals-on-demand segment as well. The US-based ride-hailing firm is aggressively expanding its meal order and delivery platform --UberEATS -- in India. UberEATS, launched in India in May, is now available in over half a dozen cities.