Food-delivery war intensifies

It is so far, so good for the Indian food-delivery space as investments and funding have ramped up in the last one month. Online food-delivery service provider Foodpanda on Monday announced that it plans to invest Rs 400 crore in the business to focus on scaling up technology support, building logistics and hiring delivery executives to strengthen its network across the country.

The intensity of competition has heightened in the food-tech business, which went through a rough phase in 2015-16, as deep-pocketed rivals such as Swiggy and Zomato managed to woo global investors to pump in money into their business.

Last week Bengaluru-based Swiggy raised $100 million, in its largest funding round, led by South African media conglomerate Naspers. So far, Swiggy has raised $255 million across six rounds of funding. Early this month, Gurugram-based Zomato, a food ordering and restaurant discovery platform, raised $200 million from Alibaba's affiliate Ant Small and Micro Financial Services Group.

Flushed with money, the companies are now jostling for consumer mind space and wallet share. In the food-tech business where companies clone each other’s offerings in no time, focus on a clear delivery proposition is a key. Technology and logistics back-end has to work seamlessly for a high quality customer experience, an area which most of the food-delivery startups grapple with.

Foodpanda plans to hire 25,000 delivery executives in the next 12-15 months to strengthen its last mile connect, the company said in a statement. “A strong technology backend and a dense logistics network would also ensure better services for present and prospective customers. The investment will focus on creating transparent, more efficient and time saving procedures for delivery logistics,” it added.

“Creating a strong delivery ecosystem backed by technology is one of the most fundamental needs of the Indian food tech industry. We at Foodpanda recognise this and are investing Rs 400 crores to further strengthen our delivery network across all the metros and other key cities," said Pranay Jivrajka, chief executive, Foodpanda India.

In December last year, ANI Technologies Pvt Ltd, the parent company of taxi-hailing service Ola, acquired Foodpanda India from Germany’s Delivery Hero AG, in an all-stock deal. At the time of the acquisition, Ola had said it will infuse $200 million in Foodpanda India’s operations.

With this deal Ola has again made its foray into the online food ordering and delivery space. In 2014, it had started Ola Cafe, which was shut down shortly. Ola’s biggest rival Uber Technologies Inc. also made its entry into the food business in May last year through its unit UberEATS.