Rivals Foodpanda and Delivery Hero trade companies

Foodpanda buys four startups in India and Mexico, while Delivery Hero takes over Latin America

So this is a scenario I have to say that I have never seen before: two companies, rivals and both major players in their space, come to a deal where they, essentially, swap acquisitions. I'm sure this has happened before at some point, but it's still pretty unusual.

Two food delivery apps, Rocket Internet's Foodpanda and Delivery Hero, have come to an agreement with each other, to take certain acquisitions off each other's hands in order to consolidate in certain areas of the world, it was announced on Monday.

As per the deal, Foodpanda has acquired four startups from Delivery Hero. The first is TastyKhana, which was one of the first food delivery portals in India. The company will remain as an independent brand, but together they will partner with over 10,000 restaurants in India, covering over 173 cities. 

The other three are PedidosYa, SeMeAntoja and Superantojo in Mexico, which mean that Mexican customers in 10 cities will have the selection from over 2,500 restaurants.

“The acquisitions allow us to extend our market leadership in India and improve our strong position in Mexico," Ralf Wenzel, Co-Founder and Managing Director of Foodpanda group, said in a statement.

"Combined with our efforts in other important markets such as Russia, Brazil and South East Asia, where we already gained a leading position, we are best positioned to accelerate growth and become the ‘Amazon’ of food ordering in emerging markets.“

Meanwhile, Delivery Hero has made acquisitions to help it expand in Latin America, purchasing businesses in Argentina, Chile, Colombia, Ecuador and Peru from Foodpanda. In all, it will give the company 17,500 restaurants across eleven countries in Latin America, including Argentina, Brazil, Chile, Colombia, Ecuador, Panama, Paraguay, Peru, Puerto Rico, Uruguay and Venezuela.

Founded in 2012, Foodpanda has services in over 40 countries, including Croatia, Bulgaria, Serbia, Kazakhstan, Azerbaijan, Tanzania, Qatar, Pakistan, Nigeria and Uganda. Last year, the company rolled out to 20 countries and, \earlier this year, it expanded its operations in Russia through its purchase of Delivery Club, the country's leading food delivery service.

This summer it raised $60 million in funding, bringing the company's total funding to $108 million, with plans for international expansion, specifically in regions where it already has services, including Latin America, so it is curious that it would give up its holdings in that market.

Another area it has been focusing on, though, is Southern Asia, which explains its move to expand in India.

Delivery Hero has raised over $635 million since its founding in 2010, with $523 million of that coming this year. It most recently raised $350 million in new funding in September. The company is now valued at roughly $1 billion. 

The majority of that has been used to expand in the European, Asian and Latin American Markets, so its deal with Foodpanda make a lot of sense for its strategy. 

What this deal really suggests is that the two companies are staking their claim in certain areas, with Foodpanda perhaps focusing less on Latin America and Delivery Hero putting less resources into Southern Asia. Maybe the idea is to stay out of each other's way, to allow both of them to grow and dominate certain markets.

(Image source: coutureinthesuburbs.com)