30 August, 2016, India :
The embattled Rocket Internet-backed Foodpanda, which last year saw allegations of internal fraud and misappropriation of funds being levelled against its top management, is learnt to be in the process of raising fresh capital.
The company recently mandated Mumbai-based mid-market investment bank o3 Capital for a $40-60 million fund-raise as it initiates talks with investors, people familiar with the matter told TOI. It’s not clear if the fund-raise process could eventually lead to the sale of Foodpanda, sources said.
“Foodpanda is going to focus on quality standards for all the kitchen ops cycles, right from procurement of raw material to the final stage of dispatching packaged food from the restaurant to the customer,” the company said in a statement.
The Rocket-incubated company recently said it’s selling its Indonesian business and rethinking its presence across the rest of Southeast Asia as the Samwer brothers struggle to show profitability for most of their high-burn portfolio of consumer internet startups.Last month, fashion and lifestyle e-tailer Jabong, in which Rocket Internet was a major shareholder, was sold to Myntra in a slump sale at a valuation of $70 million.
When contacted by ToI, Saurabh Kochar, Foodpanda India’s CEO, confirmed o3 Capital was supporting the company in its current fund-raising process. “Also, to be certain, we are not looking to exit India. We have grown rapidly over the last months while increasing our already positive operating margins and would continue to do so going forward.”
Foodpanda India may have turned around in the past six months with average daily orders inching up to about 30,000 from the lows of last year, multiple people said. Swiggy , the market leader, is clocking about 45,000 orders per day on an average while Zomato’s number is around 35,000. “They are currently looking to raise money from financial investors but are parallelly talking to strategics as well. They’ve re moved a lot of the discounted restaurants from their platform and shut down operations in many cities. Also, their unit economics has improved considerably ,” a person cited earlier in the report said. Source- ToI