Foodpanda has had an unhappy few months. In September last year, Mint had published a detailed expose on the company that talked about large scale corruption and mismanagement at the company. Later that year, it had been taken to court in Delhi over irregularities over its VAT calculations. And in late December, it decided to trim its operations by firing 300 employees.
All this while, competition in the food delivery space had only intensified. Swiggy had gone from being a fringe player to a serious threat, and Zomato had made its much anticipated foray into the delivery business.
Reports have now emerged that Foodpanda might’ve had enough. ET says that the company is looking to sell out, and has approached both Swiggy and Zomato for a possible sale. Though the company’s Indian arm is now being valued as little as $10 million, it still has no takers. Foodpanda has so far raised $218 million from investors.
Germany-based Rocket Internet, Foodpanda’s parent company, is having a hard time in general with its India portfolio. It has reportedly also put Fabfurnish and Printvenue on the auction block. It had earlier tried to sell of Jabong to both Amazon and Snapdeal, but talks had fallen through.
Food tech has been a bruising business over the last few months. Late last year, SpoonJoy, Dazo and Eatlo had shut down, and TinyOwl and Zomato had fired employees. This year, Zomato had pulled out of four Tier 2 cities citing low demand. A consolidation in this sector is imminent, and Foodpanda’s sale might be the first sign that’s it’s begun.