At the time of these acquisitions, Foodpanda India claimed that both TastyKhana and JustEat would continue to run independently. By 2016, however, both brands were on their way to extinction. And as food delivery startups like Eatlo and Dazos shut shop, Foodpanda’s major backer’s Rocket was looking for the exit doors. That exit would finally come towards the end of 2016 when Rocket Internet sold its majority stake to Foodpanda’s rival food delivery platform, Delivery Hero.
Food delivery platform
Any hopes that this would give the flagging food delivery platform a boost would prove far off the mark. And just over a year later, Foodpanda was sold to Ola in a distress sale. To sum up, three management changes, multiple funding rounds, two acquisitions, and many losses of face later, Foodpanda India is a shadow of its former self. For perspective, Foodpanda publicly claims to be present in more than 50 cities at present.
At its peak in 2015, Foodpanda was in more than 150 cities thanks to its acquisition of JustEat and TastyKhana. And add to this the presence of Swiggy, Zomato, and to a smaller extent UberEats, and the road ahead seems rough and long.
But Ola thinks it can do what no one else could—turn Foodpanda around.
The Lazarus act
Ola’s interest in the food delivery business is older than its tryst with Foodpanda. Foodpanda, in fact, is Ola’s second stab at the food delivery market. The honor of first going to Ola Cafe, which failed to make it past the pilot stage. A feature on the regular Ola app rather than a standalone platform, OlaCafe only offered certain items from each restaurant on its platform rather than offering the entire menu.
Ola drivers in the vicinity of the restaurants would then pick up orders and deliver it to customers. However, the model wasn’t sustainable, and the Ola Cafe tab on the Ola app disappeared around a year after it was introduced.
But this wasn’t Ola giving up on the food delivery sector. This was a strategic retreat. And as Swiggy and others grew in size, Ola grew hungrier for a share of the food delivery pie. “With the rapid growth of Swiggy and UberEats, Ola felt like the time was right.
However, it couldn’t start afresh with a new (food) brand. Foodpanda was a natural choice,” says a consultant who works for Ola. The person requested anonymity as he is not allowed to talk to the media.
Shifting to the senior-level employees
To help steady the ship, Ola announced at the time of the acquisition that it would set aside a $200 million war chest for Foodpanda. The company also shifted several senior-level employees from Ola to Foodpanda across roles like business strategy, engineering, sales, and operations, as per two people close to Foodpanda’s management. Ken wasn’t able to independently verify the number of employees that were moved internally.
The source who was briefed on Ola’s strategy for Foodpanda said that Ola CEO Bhavish Aggarwal tasked McKinsey’s managing partner Sudiptha Pal with constructing a business strategy to reboot Foodpanda India. Foodpanda is yet to respond to a detailed questionnaire sent by The Ken.
Foodpanda, according to a source who was briefed on Foodpanda’s business strategy, intends to differentiate itself from its rivals in one major way. While others focus on restaurants, Foodpanda’s focus will be directly on the food.
Well, yes, a food delivery platform’s focus ought to be food, just like ride-hailing platforms ought to ride. So what does that mean?
This stems from Ola CEO Aggarwal’s belief that food delivery is a business of selling various food items rather than promoting a bunch of restaurants. “His thesis is quite different from Swiggy, Zomato, and UberEats. Swiggy and Zomato believe that they are a restaurant-first business. Bhavish actually believes that the (food delivery) market is a food-first business,” adds the source.