Acquisitions and mergers are part and parcel of any business, however, what remains interesting is the amount of money that is involved in these procedures. As part of a similar process cab aggregator Ola acquired Foodpanda India from Germany-based Delivery Hero Group for as little as USD 4.4 million. As per its filings with the Ministry of Corporate Affairs, Ola parent ANI Technologies issued preference shares worth USD 4.4 million to buy 100% stake in Pisces eServices, the Indian company that operates Foodpanda.
The acquisition, which took place in the third week of December 2017, marked Ola’s return to the Indian online food delivery space after its first attempt Ola Cafe was shut down in March 2016. This is also being looked at as Ola’s attempt to match up-to to its rival Uber, after Uber launched its Uber eats division in India.
Bhavish Aggarwal, co-founder and CEO at Ola, while speaking on the occasion mentioned,
“I’m excited about our partnership with Delivery Hero as we team up to take Foodpanda India to the next level. As one of India’s pioneers in the food delivery space, Foodpanda has come to be a very efficient and profit-focused business over the last couple of years. Our commitment to investing $200 Mn in Foodpanda India will help the business be focused on growth by creating value for customers and partners. With Delivery Hero’s global leadership and Ola’s platform capabilities with unique local insights, this partnership is born out of strength. I look forward to welcoming the Foodpanda India team to the Ola family.”
As part of the deal, Delivery Hero reportedly invested USD 27.3 million in SoftBank-backed Ola, thereby acquiring 1% stake in the ride-hailing unicorn. Ola, in turn, infused the USD 27.3 million from Delivery Hero into Foodpanda India, in a bid to bolster its business.
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.
For Ola, the acquisition of Foodpanda India is a strategic move aimed at not only gaining a stronghold in the India online food delivery market, but also driving revenue in order to become profitable by the next financial year.