With a price tag ranging as low as $10-15 million, Rocket Internet-backed Foodpanda is desperately searching for a buyer for its troubled India operations. The Samwer brothers-led Rocket Internet's interest in its Indian portfolio has been weakening with most of its flagship firms like FabFurnish and PrintVenue, being put on the block.
According to a source, Foodpanda has held talks with its competitors in India, who have been pitched with a sale value of $10-15 million.
Even after expecting a low valuation, the food ordering platform has not got a buyer yet, signaling that it may decide to shut India operations soon.
A source said that both Zomato and Swiggy have been approached for a buyout, besides one larger horizontal company. But, Rocket is yet to garner keen interest from possible suitors for Foodpanda.
Zomato's founder and CEO Deepinder Goyal did not respond on the issue and Swiggy's co-founder Nandan Reddy did not comment. According to an email conversation, a spokesperson of Rocket Internet communicated that they would not like to comment from Rocket's side to rumours about Foodpanda.
Last year, Foodpanda raised more than $300 million from the Berlin-based Samwer brothers and Goldman Sachs for its global business. That's when it invested heavily in the Indian market, becoming one of the largest players in the online food ordering segment.
In order to ward off rivals Zomato and the likes of Swiggy and TinyOwl, Foodpanda acquired TastyKhana and Just Eat in India. But it has since been on a downhill slide.
Interestingly, last year reports surfaced of an alleged fraud and systematic discrepancies in Foodpanda's operations. The company then relieved 300 people as the overall food delivery market hit a rough patch.
The food technology sector, which observed a rush of early-stage funds over the past year, is in middle of a major restructuring, resulting in hundreds of job cuts. Zomato and TinyOwl together fired more than 500 people and have been scaling down operations. Gurgaon-based Zomato recently stopped taking online food orders in four Indian cities.
Pisces eServices operated Foodpanda India, reported a loss of Rs 36 crore in March 2015 over revenue of close to Rs 5 crore, according to data from the Registrar of Companies (RoC) at the ministry of corporate affairs.
Foodpanda claims to have over 12,000 restaurants on its platform across 200 cities in India. While Zomato claims to be clocking 50,000 transactions per day, Swiggy facilitates about 20,000 transactions and TinyOwl registers 5,000-6,000 orders per day after it shut operations in four cities. Foodpanda India claimed its orders have risen 10 times in last year, while industry estimates say it facilitates about 25,000 orders a day.
Rocket's other portfolio companies such as FabFurnish and PrintVenue are also on the verge of shutting down if they fail to get a buyer by the end of this fiscal. Foodpanda's top leadership team in India, including co-founder Rohit Chadda, who helped set up its Indian services, stepped down as MD in August last year. Also other two co-founders, Amit Kohli and Akhilesh Bali, have also moved to other ventures.