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Ola to focus on Foodpanda's cloud kitchen, deserts delivery

Foodpanda is Ola’s second stint in food-tech sector. It started Ola Café in 2015 and was shut down within a year in 2016

May 22, 2019 by The Passage Team
Ola to focus on Foodpanda's cloud kitchen, deserts delivery

About 18 months after acquiring Foodpanda India, Ola is suspending the company’s food delivery business to focus on its in-house food brands, including Great Khichdi Experiment, Lovemade and FLRT, sources told Mint.

The company has terminated the contracts of most of its 1,500 food delivery executives and is laying off about 40 mid to entry-level employees. However, it is hiring new talent for the cloud kitchen business.

It was reported earlier that ride-hailing major Uber too has reduced its focus on the online food delivery market, leaving it for Swiggy and Zomato to dominate the sector. Uber has halved the annual allocation for its food-delivery business in India to USD 90-120 million.

“They (Ola) have realized they can’t burn money like Swiggy and Zomato, which is why they only want to do in-house brands. Over the last few months, Foodpanda has been scaling down its marketplace. They have launched a few brands and plan to launch a few more—sort of like Faasos,” a person aware of the development told Mint.

Founded in 2012 by Ralf Wenzel, Rohit Chadda, Ben Bauer and Felix Plog, Foodpanda has seen three management changes by now. Germany’s Rocket Internet sold the company, which was operational in more than 40 countries, to rival firm Delivery Hero in December 2016. Ola acquired Foodpanda’s India unit for USD 40-50 million in December 2017.

Foodpanda is Ola’s second stint in food-tech sector. It started Ola Café in 2015 and was shut down within a year in 2016.

During its peak in August 2018, Foodpanda clocked close to 200,000 orders daily. This number has fallen to around 5,000. Swiggy and Zomato each, however, are clocking 1.1 million orders daily.

The Passage Team

The Passage is committed to creating in-depth content over technology industry across Asia with a focus on emerging startups in the technology, healthcare, education, food, tech, travel & mobility segments.

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