Radio taxi aggregators Ola on Sunday said it will acquire Foodpanda's India business from Germany-based Delivery Hero Group in exchange of its stock.
Besides, the SoftBank-backed company has committed investments to the tune of USD 200 million in the Foodpanda India business, which is the largest such funds infusion in an Indian online food ordering and delivery company till now.
Under the deal, Foodpanda's India business will be transferred to Ola in exchange of the latter's stock, Ola said in a statement. It, however, did not divulge details about the number of shares that will be part of the transaction.
The competition has been intense in the segment with the likes of Zomato and Swiggy competing aggressively to capture the market. It heated up further after the entry of UberEATS -- the food delivery service of Ola's rival Uber -- in the Indian market a few months ago.
According to industry sources, the Softbank-backed Ola had been working on getting back into the food delivery business to compete against UberEATS and that the acquisition of FoodPanda India is a step in that direction.
They did not wish to be identified as the discussions are private. Ola did not comment on the matter. Ola said Foodpanda India will benefit from its scale and efficiencies as a platform and it will continue to collaborate with Delivery Hero on building the online food delivery ecosystem in India.
Saurabh Kochhar, who was the CEO of Foodpanda India until recently, has decided to move on to pursue other opportunities.
Ola Founding Partner Pranay Jivrajka has been appointed as interim CEO of this business unit, supported by the existing leadership team at Foodpanda India.
"I'm excited about our partnership with Delivery Hero as we team up to take Foodpanda India to the next level. Our commitment to invest USD 200 million in Foodpanda India will help the business be focused on growth...," Ola co-founder and CEO Bhavish Aggarwal said.
Niklasstberg, Chief Executive Officer and co-founder of Delivery Hero AG, said the partnership will allow it to further consolidate markets.
"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," he added.
Foodpanda has over 15,000 restaurants across 100 Indian cities on its platform. Its revenue stood at Rs 62.16 crore in 2016-17 compared to Rs 37.81 crore in the previous fiscal, on the back of strong growth in orders in key markets.
Its losses to declined 69 per cent to Rs 44.81 crore in 2016-17, from Rs 142.64 crore in 2015-16. The company had said it aimed to be profitable by 2019.