Online food delivery service in Germany Delivery Hero intends to consolidate Foodpanda’s operations in Germany and sell Foodpanda Japan in the first quarter of 2022.
Foodpanda will be available in a limited number of cities throughout Germany, including Cologne, Düsseldorf, Frankfurt, Hamburg, Munich, and Stuttgart. It will, however, continue to operate its Berlin-based testing facility to evaluate new product features and technologies.
Niklas Ostberg, co-founder and CEO of Delivery Hero, explained that scaling down operations in Germany and planning to divest their Japanese business was not easy. Even though they have built two fantastic FoodPanda teams making significant progress, it has become increasingly difficult to create true ecosystem value in these countries. The CEO is in awe of both teams’ accomplishments over the last few months.
This summer, Delivery Hero launched the Foodpanda service in Berlin and later expanded to other German cities. However, the online food delivery service faced several challenges, including increased competition and a shortage of riders. The company has now identified new markets with higher returns on investment (ROI) and new verticals, most notably in short commerce.
Foodpanda employees affected by the closure will be transferred to the Delivery Hero Group, its network of industry partners, or will receive a severance package. In Japan, the company chose to divest Foodpanda to focus on other growth opportunities.
In August 2021, Delivery Hero agreed to sell its Korean operation to a consortium for a total enterprise value of $687 million.