Ola-backed Foodpanda pumps in fresh funds of Rs 400 Cr to enhance its delivery networkSindhu Kashyap
Foodpanda, which was recently acquired by Ola, has announced that it is looking to invest Rs 400 crore to strengthening its delivery network. The current investment will help the food delivery startup scale its technology, and build a good experience for its users, riders and restaurant partners across metros and other key cities of India. The press statement by the company added that it aims to hire 25,000 deliver riders in the next 12 to 15 months.
The online food delivery company added that it is looking to create targeted interventions for a few partner restaurants to help create significant long-term business value. It added that the company will focus on creating transparent, more efficient and time-saving procedures for delivery logistics.
Pranay Jivrajka, CEO, Foodpanda India said in a press statement,
"Creating a strong delivery ecosystem backed by technology is one of the most fundamental needs of the Indian food tech industry. We at Foodpanda recognise this and are investing Rs 400 crore to further strengthen our delivery network across all the metros and other key cities. 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.”
This announcement just comes in time when Swiggy announced raising $100 million Series F funding last week, in round led by Naspers and Meituan-Diaping, and the week before Zomato had raised $200 million led by Alibaba's Ant Financial.
Foodtech startups were built on the foundation that roti, kapda aur makaan could never go out of demand, but over time many of them faced an early death. By 2016, several food startups - TinyOwl, Dazo, Spoonjoy, Eatlo, and EatOnGo were out of the fray; this chill continued to the beginning of last year, with EatFresh and Yumist shutting shop. Only the big two – Swiggy and Zomato – survived successfully.
Swiggy has raised total funding of over $255 million for a valuation of $650 million. Zomato has raised 10 funding rounds amounting to $443.8 million, and a valuation of $1.1 billion. It was in 2015 that Zomato ventured into the food-delivery space.
Uber too wanted a share of the pie. While Zomato and Swiggy survived the bloodbath and the market settled last year, uberEATS launched operations in India. Since May, uberEATS has been pushing aggressively into the India market by acquiring delivery boys and adding more restaurant partners with each passing week.
Ola late last year said $200 million invested will be focused on creating more value and in growing the business. Foodpanda currently claims to have 15,000 restaurant partners in across 100 cities in the country.
According to RedSeer Consulting, the food delivery sector is set to hit $1.5 billion by the end of 2018 and touch $2.5-3.5 billion by 2021 in GMV terms. The sector, which valued at $750 million, is growing at a 15 percent quarter-on-quarter rate.
This push by Foodpanda makes the game all the more interesting.