Ola suspends Foodpanda India’s delivery business, lays off several employees

Photo: Livemint

About 18 months after acquiring Foodpanda India, ANI Technologies Pvt. Ltd-owned Ola has suspended the company’s food delivery business, laid off about 40 mid- to entry-level employees and terminated the contracts of most of its 1,500 food delivery executives, four people aware of the development confirmed.

Most of the restaurants on the Foodpanda platform, when accessed through the Ola app, are “unavailable”, although an advertisement of one of its in-house brands is still displayed. Foodpanda’s in-house brands or cloud kitchens will continue operations.

“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,” one of the people cited earlier said on condition of anonymity. “They have launched a few brands and plan to launch a few more—sort of like Faasos.”

Ola and Foodpanda did not respond to queries sent by Mint till press time.

“In the last two weeks alone, the company (Ola) has dissolved the ground team completely. The core operations team consisting of senior employees is being retained,” said the first person cited earlier. “The entry-level employees were given intimation first, followed by the on-ground operations team.”

With the suspension of the food delivery business, Ola is currently in talks with delivery players such as Dunzo and Zomato to relist its cloud kitchen brands. Foodpanda would focus only on running the cloud kitchen brands instead of a food delivery business, said the second person aware of Ola’s operations.

Founded in 2012 by Ralf Wenzel, Rohit Chadda, Ben Bauer and Felix Plog, Foodpanda has seen three management changes since its inception. Germany’s Rocket Internet, at one time the largest investor in Foodpanda, sold the company, which was operational in more than 40 countries, to rival firm Delivery Hero in December 2016.

Within a year of the company being handed over to Delivery Hero, Foodpanda’s India unit was acquired by Ola for $40-50 million in December 2017. Around the same time, Ola announced plans to infuse around $200 million into Foodpanda.

Ola chief executive Bhavish Aggarwal oversaw staffing of executives at Foodpanda post the acquisition, said the second person.

At that time, Foodpanda offered deep discounts to attract customers. During its peak in August 2018, it clocked close to 200,000 orders daily, according to industry estimates. This number is now around 5,000. In contrast, Swiggy and Zomato each clock around 1.1 million orders daily, shows industry estimates.

This article was first published on livemint.com

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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).

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  • 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.