Saudi merger turns Foodpanda profitable in Middle East
The emerging markets food specialist entered the Middle East in 2013 by establishing Hellofood in Saudi. Its arrival followed the launch of HungerStation in Dammam by entrepreneur Ebrahim Al-Jassim in 2012 as one of the first online food ordering portals in the region. Today, the service is available in over 30 cities across Saudi Arabia.
Both Hellofood and HungerStation will continue to operate in the kingdom, where the combined businesses have over 3m app installs, more than 1m active users and an inventory of over 2,000 restaurants.
The deal will turn Foodpanda’s Middle East business profitable, making it the second of the three regions in the network to reach profitability for the company. Its Central and East Europe division is already in the black, while Ralf Wenzel, co-Founder and chief executive of Foodpanda Group, predicts that the business will break even and then turn profitable in some Southeast Asian countries.
Al-Jassim will lead the Saudi business, alongside Foodpanda’s regional managing directors. The existing teams for both companies will remain intact.
Companies like Foodpanda, which is 49% owned by Berlin-based e-commerce investor Rocket Internet, are under pressure to turn profits while chasing growth at a time when food-delivery apps are skyrocketing in popularity.
“HungerStation and Hellofood consolidate our market leadership in the region and we are proud to have achieved overall profitability just three years after launch,” said Wenzel.
Ebrahim Al-Jassim, founder and chief executive of HungerStation said Foodpanda’s experience, resources and technology would drive his company, the online food delivery leader in Saudi, even further.
Foodpanda has been growing since its launch in 2012, and its last round of funding came in March last year when it received US$110m from Rocket Internet. It has so far established markets in 14 Asian countries and nearly 40 countries worldwide.
