After Ola’s return to food delivery with the acquisition of FoodPanda, the cab aggregator is reportedly now eyeing private label food firms. This comes as Ola looks to create an independent Food Technology Company, reports Mint.
As part of the new plan, it has reportedly held talks with Mumbai-based Freshmenu and another food tech firm. However, there is no deal in place yet.
Mint also reports that Ola may raise funds separately for FoodPanda as well later in the year as there is strong demand currently in the investor community for food-tech.
Ola is looking to create a larger group company, something similar to what Flipkart has done. It recently acquired Ridlr to tap into public transport, apart from having a payments unit under Ola Money. Idea is to increase the valuation of the company by having independent assets.
The creation of a separate food tech unit is part of the same strategy.
Ola acquired Foodpanda in December from Germany-based Delivery Hero Group, which then owned Foodpanda in India. Ola also committed to invest $200 million into the Foodpanda India business. The deal included the transfer of Foodpanda’s India business to Ola in exchange for Ola stock.
The competition in the foodtech space has been growing with both Swiggy and Zomato expanding operations aggressively. Swiggy is currently the market leader with around 38% market share, followed by Zomato. According to RedSeer data, average daily orders at these startups went up to 450,000 in 2017, up from 200,000 the year before.
This also attracted players such as Uber to enter the food delivery market with UberEats.
The industry, which saw a slump until early 2017 also saw sudden spike in investor interest.
In February, Swiggy raised $100 million from Naspers and a Chinese company Meituan-Dianping in a series F funding round. A week before that, rival Zomato raised $200 million from Alibaba’s financial arm Ant Financial post which its valuation rose to $1.1 billion.