Ola parent ANI Technologies is reportedly planning to invest $62.2 Mn (INR 400 Cr) in newly-acquired online food delivery platform Foodpanda India. The capital infusion, which will take place over the next 12 months, is geared towards bolstering Foodpanda India’s logistics and delivery capabilities.
A portion of the financing will also go into further developing the startup’s tech stack, as it prepares to tackle competition from heavily-funded rivals like Zomato and Swiggy.
By improving its backend technology, Foodpanda aims to make the onboarding of new restaurant partners more seamless, sources revealed.
Commenting on the company’s future plans, Pranay Jivrajka, founding partner at Ola and the newly-appointed CEO of Foodpanda India said, “Creating a robust technology stack is a fundamental need, which will also play a massive role in building a strong delivery ecosystem. We are also working on the consumer-facing side of the business to provide a more fulfilling user experience.”
The development less than two months after homegrown cab aggregator Ola acquired Foodpanda India from Germany-based Delivery Hero Group for $31.7 Mn (INR 202 Cr).
As per its filings with the Ministry of Corporate Affairs, Ola parent ANI Technologies issued preference shares worth $4.4 Mn (INR 28 Cr) in the third week of December 2017 to Pisces eServices, the Indian company that operates Foodpanda.
This marked Ola’s return to the Indian online food delivery space after its first attempt Ola Cafe was shut down in March 2016. As part of the deal, Delivery Hero reportedly invested $27.3 Mn (INR 174 Cr) in SoftBank-backed Ola, thereby acquiring 1% stake in the ride-hailing unicorn.
Ola, in turn, infused the $27.3 Mn from Delivery Hero into Foodpanda India, in a bid to bolster its business. At the time of the announcement, Ola also committed to invest $200 Mn in Foodpanda India.
According to a senior Ola executive, the deal was more than just the acquisition of Foodpanda by Ola. It was mainly about DeliveryHero and ANI Technologies joining hands to strengthen the food delivery platform’s business in India.
How Foodpanda Is Preparing To Thwart Competition From Zomato, Swiggy
Foodpanda India currently has a network of 17,000 restaurants across 150+ cities. In December 2016, parent Foodpanda was acquired by Delivery Hero, one of the leading global players in food ordering and delivery marketplace, which went public with a $ 1.1 Bn IPO in June 2017.
In November 2017, Foodpanda India claimed revenues of $9.6 Mn (INR 62.16 Cr) in FY 16-17, a 64% jump over the earlier $5.87 Mn (INR 37.81 Cr) in FY 15-16. The company credited its strong growth for the year to the success achieved in its key markets.
As stated by Pankaj, the online food delivery startup is doubling down to gain a stronghold in the country’s top 10 cities, which currently account for more than 50% of Foodpanda India’s total orders. To that end, the Ola-acquired company is looking to expand its rider base from the current 4,500-5,000 to around 25,000 over the next 12 to 15 months.
He added, “We are also ramping up our last mile connect by hiring 25,000 delivery riders. This is in line with our go-to-market strategy to make a difference in the food ordering experience of our restaurant partners, customers and riders.”
The foodtech company aims to be profitable by FY 2019, riding on its strategies such as third-party delivery logistics through Dash, food recommendation and discovery through the revamped India app, bringing Shahrukh Khan as the face of the brand and working on food quality initiatives such as the Food Doctor Program.
What’s Been Happening In The India Online Food Delivery Space?
Bengaluru-headquartered Swiggy recently announced a $100 Mn Series F fundraise led by Naspers. With this round, the foodtech startup also brought on board a new investor Meituan-Dianping.
Earlier, in January 2018, reports also surfaced that Swiggy is in talks with Naspers and Tencent to raise $200 Mn in funding.
On the other hand, Gurugram-based Zomato raked in $200 Mn funding from Alibaba Group in the first week of February 2018. The latest funding round was led through Ant Small and Micro Financial Services Group, a subsidiary of Alibaba that operates mobile and online payment platform Alipay.
India’s food delivery and take away market has been pegged at $19 Bn by Morgan Stanley. The $62.2 Mn capital infusion in Foodpanda India comes at a time when the company is aggressively trying to gain a footing in the burgeoning online food delivery space, amidst increasing competition from deep-pocketed players like Zomato, Swiggy and UberEATS.
(The development was reported by ET)