Less than two months after raising $110 million, Foodpanda — the Rocket Internet-backed food delivery service — is back at the table gobbling down an additional $100 million serving from investors.
The round was led by Goldman Sachs Investment Partners, with Rocket Internet among the existing investors also in the mix. This new funding takes Foodpanda, which is based in Berlin and was founded in 2012, to $310 million from investors to date. The company did not reveal its valuation.
Foodpanda, which was incubated by Rocket Internet, started out focusing on Asia and other emerging markets but today it covers 580 cities across 40 countries in five continents. In total, it claims to have over 60,000 restaurants on its menu. Those figures have been reached thanks to a major acquisition binge that saw Rocket Internet buy into Delivery Hero and acquire nine other food delivery startups across the world.
Foodpanda said it will use its latest cash injection of capital to “further expand its own delivery activities and improve overall customer experience,” but beyond that vagueness it isn’t entirely clear how the money will be spent.
It could just be for basic costs and breathing room, since Rocket Internet’s emerging market startups typically burn through vast amounts of money growing out logistics, hiring teams and offering incentives to woo new and existing customers.
Rocket Internet has entered early in a number of emerging markets which, in practice, means its businesses are often setting themselves up for future growth and opportunities. Aka, revenue isn’t pouring in right now… though it could in the future.
It seems likely that Foodpanda is in this ‘growth’ stage, particularly in countries where smartphone adoption is low (but growing) and the market for on-demand services, like food delivery, is nascent but with serious potential to grow.
Yet, clearly investors like Goldman Sachs see huge potential in on-demand verticals in emerging markets, where consumers typically leapfrog wired internet for the mobile internet on smartphones.
“We believe that Foodpanda has a tremendous opportunity to cement its emerging markets leadership position in the coming years. It is our expectation that the company innovative, value-added offerings will lead Foodpanda to be the winner in online food delivery within the markets in which it operates,” said Ian Friedman of Goldman Sachs Investment Partners.
With over $200 million raised in two months, it would be fair to assume that Foodpanda is full for now. But emerging market internet companies are capital intensive at scale, so don’t be surprised to see the Rocket Internet firm plating up for more investment later this year.
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