Ola has shown interest in buying private label food firms, according to a report in mint. The company hailing company recently bought Foodpanda marking its entry into the online food ordering and delivery segment. According to the report, Ola held talks with food brand Freshmenu (Foodvista India Pvt. Ltd) and at least one similar firm, but no deal has been finalised yet.
Freshmenu CEO Rashmi Daga denied that the company had held sale talks. Daga was quoted as saying, “We have had no such discussions with either Foodpanda or Ola and do not plan on merging with Foodpanda or any other aggregator in the near future. We work with Foodpanda as an aggregator partner and our relationship is only up to that point,”
Given the strong demand for food-tech start-ups, Ola may raise funds separately for Foodpanda later this year. Ola bought Foodpanda in an all-stock deal India from its German parent Delivery Hero AG. The company said it will invest $200 million to expand Foodpanda’s operations.
Ola is also into a payments business called Ola Money. It recently purchased Ridlr, public transportation app, for an undisclosed amount.
Food delivery has become a good business opprortunity as margins in the business are much higher than in grocery delivery or e-commerce business. Given the margins, Foodpanda, Zomato, and Uber all are reday to spend more to get a bigger share in the market.
Swiggy is the leader in online food delivery with a market share of 35-38% . Zomato has the market share of 25-30%, according to RedSeer Consulting. According to statistics, in 2017, average daily orders at food-ordering start-ups increased to to 450,000 from 200,000 last year.
The online food delivery business has recently been in focus, after it went through a troubled phase till sometime ago. According to a report in Mint on 2 April both Swiggy and Zomato were in talks to raise more money, less than two months after raising funds.