Foodpanda’s India unit raises $22.4m in one year

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Rocket Internet-backed food ordering firm Foodpanda’s India unit has raised over Rs.150 crore ($22.3 million) in the past year in eight different tranches from Berlin-based parent Jade Gmbh and Co., according to documents available with the registrar of companies.

The money has come in between July 2015 and June 2016.

Foodpanda is also looking to raise fresh funds, said Saurabh Kochhar, chief executive of the company, on Tuesday, adding it has roped in investment banker O3 Capital for the same.

He said that the fresh capital will be used in enhancing technology, infrastructure, delivery and for marketing activities.

The global online food delivery company had in May announced it had raised $100 million of fresh funds from investors led by hedge fund Goldman Sachs Investment Partners. The amount raised is expected to have come from the same fund. The firm, however, declined to clarify about the same.

The Times of India on Tuesday reported that Foodpanda is in talks to raise $40-60 million and may also opt for a sale. Kochhar has however declined any sale talks. He also stressed that the firm has been operationally profitable in India since February.

In September, Mint too reported Foodpanda Group could be looking to sell its Indian arm as the Rocket Internet-backed firm was revisiting its strategy in the country amid intense competition in the food-tech sector.

Rocket has already sold off two of its ventures—Jabong and Fab Furnish—in the Indian market.

While Jabong has been acquired by Flipkart Ltd through its unit, Myntra, for $70 million in July, Fab Furnish was acquired by Kishore Biyani-led Future Group in April.

The size of the round was touted to be anywhere betweenRs.15 crore and Rs.20 crore in cash.

Foodpanda (Pisces eServices Pvt. Ltd) competes with Indian rival Zomato Media Pvt. Ltd and Bengaluru-based Swiggy. Swiggy (Bundl Technologies Pvt. Ltd), raised Rs.230.34 crore ($34.3 million) in a Series C funding round in January. Existing investors such as SAIF Partners, Accel Partners, Norwest Venture Partners and Apoletto Asia Ltd together pumped in about Rs.181 crore ($26.9 million) in the round.

Zomato last raised $60 million from Singapore’s Temasek Holdings Pte and existing investor Vy Capital, valuing the company at about a billion dollars.

Meanwhile, Foodpanda, which has essentially been a food delivery platform, has also shifted from its core business and is exploring revenues beyond its current business of food delivery, Mint reported on Tuesday. It is partnering with e-commerce-focused logistics firm Ecom Express and will venture into delivering of e-commerce packets, a genre much different from its current expertise of food.

Foodpanda’s entry into e-commerce deliveries is targeted to bring in some additional revenue. At the same time, it will allow the company to utilize its delivery fleet during non-peak hours. The non-peak hours for food delivery firms are usually before noon and between 3pm and 7pm, when not much food ordering takes place.

Kochhar said a pilot for the e-commerce delivery will be launched in September in Delhi and Gurgaon. The company plans to expand the services to Hyderabad, Bengaluru and Pune if the pilot becomes a success. He, however, did not share the revenue expectation.

Food delivery firms maintain a fleet of delivery executives; a mix of people on their payrolls and those who come in at peak hours and are paid on the basis of the number of orders delivered.

Foodpanda has about 1,500 delivery personnel. Ecom Express, on the other hand, has almost 15,000 delivery boys with them round the year. However, most food delivery firms have been struggling with poor unit economics, as cost of delivery far exceeds revenue per delivery. Consequently, food delivery firms such as Foodpanda are exploring additional revenue sources to make the most of their fleet during non-peak hours.

According to industry experts, the average order value for food in the US is around $20, significantly more than the average Rs.300 ($4.47) in India. As a result, delivery firms in India which charge clients a commission of 10-20 per cent of the order value end up losing money as every delivery costs more than Rs.50 ($0.75).

Foodpanda currently has 12,000 partner restaurants in India. On Tuesday, it also launched a quality compliance initiative for restaurants and said it will invest Rs.2-3 crore ($298,000-$447,000) in the next one year on the same.

Also Read

India Digest: Foodpanda eyes up to $60m funding; Prime Focus arm raises $20m

Rocket-backed Foodpanda in the black in two of its three regions

Rocket Internet to expand ops, increase team size in Myanmar

This story was first published on livemint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.