Foodpanda expands in Hong Kong with acquisition

Photo credit: George Lu.

Rocket Internet-backed online food takeout startup Foodpanda announced today that it has acquired Delivery.com’s Hong Kong business and staff. The deal represents its third acquisition in the Hong Kong market, after earlier purchases of Koziness and Dial a Dinner.

Foodpanda raised US$210 million in 2015

An emailed statement from the company says it was attracted to Delivery.com’s expertise in servicing large enterprise clients and the sale will help spruce up its own corporate account product. Financial details pertaining to the size of the acquisition were not disclosed.

The announcement comes barely a month after Foodpanda Hong Kong said it would be laying off 15 percent of its staff to boost flagging margins. Alex Roth, CEO of Foodpanda Hong Kong, confirmed the dismissals would mostly apply to staff in operations and customer care. It is possible that the Berlin-headquartered conglomerate was simply preparing for the acquisition and making room for the influx of new employees.

Foodpanda isn’t short of cash – after all it raised a gargantuan US$210 million in 2015 alone and is backed by the likes of Goldman Sachs. It also acquired rival sites in seven countries last year.

But the food delivery business is a tricky one, with little margins and high operational expenditure. Foodpanda couldn’t compete with local players in Vietnam and had to shut shop late last year. Rocket Internet-funded DeliveryHero also exited China this month, laying off 400 staff.

“We are very excited to welcome Delivery.com Hong Kong’s corporate clients, customers and team to the foodpanda family. The team has built an excellent operation in one of our key markets and will help Foodpanda continue to drive high growth here,” said Ralf Wenzel, co-founder of Foodpanda, in an emailed statement.