The Startup Observer keenly observes the startup ecosystem to choose and list one company, person, or an entity to feature in this space every month. That entity should have created a major impact in the industry. And, this month, it’s none other than your daily commute partner Ola as it announced the acquisition of on-demand food delivery app Foodpanda’s India business.
In a strategic move, Ola bought Foodpanda’s India business from Berlin-based food startup Delivery Hero Holding GmbH, in an all stock deal. (Note: In December 2016, Delivery Hero had acquired the entire global operations of Foodpanda from German e-commerce investor Rocket Internet).
Ola has also committed an initial investment of $200 million in Foodpanda’s India business, which is said to be the largest such fund infusion in an Indian online food app company. With this new development, Ola’s founding partner Pranay Jivrajka has taken over as interim CEO of this business unit, supported by the existing leadership team at Foodpanda India, while former CEO and co-founder Saurabh Kochhar has decided to move on to pursue new opportunities.
Ola’s acquisition of Foodpanda India is seen as a move to compete against rival Uber which launched UberEATS in May this year, starting with Mumbai. Interestingly, this is Ola’s second attempt at running a food delivery service. It launched OlaCafe for a year in 2014 before it decided to shut down. It remains to be seen whether the combination of app-based food delivery and ride-hailing is a success or a failure.