Foodpanda is Ola's chef in battle with Uber

Ola, the homegrown cab hailing and mobility platform, is taking rival Uber head-on in the food ordering and delivery service space with the acquisition of Foodpanda that has been struggling with its operations in India.

An outcome of Ola's partnership with the Germany-based Delivery Hero Group, the deal includes transfer of Foodpanda's India business to Ola in exchange for Ola stock.

Bhavish Aggarwal, co-founder and chief executive officer, Ola, said as one of India's pioneers in the food delivery space, Foodpanda has come to be a very efficient and profit-focused business over the last couple of years. "Our commitment to invest $200 million (approximately Rs ) in Foodpanda India will help the business be focused on growth by creating value for customers and partners," he said, adding that the partnership will take Foodpanda India to the next level.

Ola had earlier experimented with food delivery with its Ola Cafe in 2015; it was shut down in March 2016.

Foodpanda India has been up for sale for as low as under $15 million since January last year. However, with no interest from buyers despite reports of talks with Zomato and Swiggy, the company was left with no option but to rationalise business operations.

The efforts bore fruit as last month, Foodpanda's India unit said its revenue for the year through March 2017 jumped 64% on year to Rs 62.16 crore while losses narrowed to Rs 44.81 crore from Rs 142.64 crore.

The platform, currently available on both mobile (application) and desktop features over 15,000 restaurants from across 100 plus Indian cities, claims it has registered a profit on every order fulfilled and that it expects to be profitable in 2018-19.

Post this deal with Ola, Saurabh Kochhar, who was the CEO of Foodpanda India, is moving on to pursue other opportunities. Pranay Jivrajka, founding partner at Ola, has been appointed as interim CEO of this business unit, supported by the existing leadership team at Foodpanda India.

Niklas Ostberg, chief executive officer and co-founder, Delivery Hero AG, said the partnership with Ola will allow to further consolidate markets where it strategically makes sense to collaborate with leading local players. "At the same time, we consider our stake in Ola as a very valuable asset, while Ola's investment commitment in Foodpanda India is a clear and confident signal to the Indian market," he said.

Backed by German e-commerce investor Rocket Internet in the earlier stages, the entire global operations of Foodpanda were acquired by food delivery company Delivery Hero Holding GmbH in December 2016.

Earlier in September this year, according to media reports, South African media firm Naspers hiked its holding in Delivery Hero and bought half the stake of Rocket Internet for €660 million ($775 million).