Ride-hailing startup Ola rejigs food division; boosts focus on cloud kitchen: sources

Ride-hailing startup Ola is rejigging its food division and is developing a portfolio of food brands and curated food offerings as part of the company's business re-purposing initiatives, sources familiar with the matter told YourStory.

Foodpanda, which was acquired by Ola in 2017, has decided to focus on expanding the company’s 'cloud kitchen' brands, but FoodPanda will still be used to place food delivery orders, the sources added. 

Cloud kitchens operate on a delivery-only model, saving on real estate costs as these brands do not offer dine-in facilities, but are backed by a solid logistics network allowing them to reach more consumers.

FoodPanda, which primarily makes its money from commissions and delivery fees, has been expanding in the cloud kitchen space, as part of its plan to launch its own products. The company currently runs a large network of over 50 kitchens across India.

The kitchens are running in Bengaluru, Delhi, Mumbai, Pune and Chennai, and Ola will continue hiring employees with 'culinary experience', sources told YourStory. The company's food brand offerings are already available in all major cities through the Ola and FoodPanda apps. 

Ola is looking at opening offline stores as well, and is developing brands such as The Khichdi Experiment, Flrt, Lovemade, and Grandma's Kitchen, the sources confirmed to YourStory.

Ola did not immediately confirm the source-based information, but a spokesperson told YourStory,

"We continue to invest in expanding our facilities and kitchens, as well as our portfolio of food offerings for our customers. We remain committed to our mission of building a superior food experience for millions of our customers."

The Indian foodtech industry is highly competitive, with established players such as Swiggy and Zomato jostling for space with newer entrants such as UberEats and Ola. The market is expected to grow to $2.5 billion in 2021, from $700 million. 

FoodPanda, which is active in 40 countries, had posted a sharp five-fold increase in losses for the 2018 financial year. Its losses widened to Rs. 227.95 crore from Rs.44.82 crore the previous year. In 2018, the company said that it would invest Rs. 400 crore in India to strengthen its network.

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