Foodpanda, the food delivery startup backed by Rocket Internet, is selling its operations in Indonesia and evaluating its presence in the rest of Southeast Asia as part of a push towards profitability.
Multiple sources close to the company told TechCrunch that its business in Indonesia, the world’s fourth-most populous country, is available to potential acquirers for less than $1 million — and an all-cash deal isn’t even a requirement. Foodpanda, which is active in 500 cities across five continents worldwide, has slashed the asking price for its Indonesia operations to basically zero after more than a year of unsuccessfully trying to offload it, one source added.
Indonesia may be Southeast Asia’s largest economy but it has proven to be a challenge due to factors including competition and local market conditions. Go-Jek, a motorbike taxi-on demand company that this month raised $550 million, is the primary thorn in Foodpanda’s side. The company offers food delivery as one of its many services, and it is able to price that business competitively thanks to its massive fleet of 200,000 drivers and revenue from other services. Grab also offers services like food delivery, while Uber is tipped to follow suit.
TechCrunch understands from a source that the company is reevaluating its entire business across the region, and it has already made tentative efforts to sell in some countries.
That’s evidenced by a recent round of capital for Global Fashion Group (GFG), a collection of Rocket Internet-backed fashion marketplaces worldwide. GFG raised $330 million but the capital came from a collection of trusted Rocket Internet entities and at a huge mark down. The group’s valuation plummeted from $3.4 billion at its last raise to $1.1 billion.
Sources speaking at the time told us that GFG CEO Romain Voog met with more than 90 investors, but came home empty-handed.
GFG had already preempted that challenge by discarding some of its unprofitable business units in Southeast Asia — does that sound familiar?! — which included the sale of Zalora Thailand and Zalora Vietnam for low prices and triggered high-level execs to leave. Rocket Internet isn’t alone to struggle in Southeast Asia, though. Groupon sold its Indonesia business to fitness membership startup KFit, a fairly unorthodox acquirer, after it had already exited other Asian markets.
This year has marked a different approach for Rocket Internet in Asia. This summer, it finally offloaded Jabong, its fashion marketplace in India, to rival Myntra in a $70 million deal this summer, while Alibaba bought a majority stake in Amazon-like Lazada for $1 billion in April. Despite a seemingly decent outcome on the face of it, many Lazada investors were left disappointed, and the company itself ran out of money thanks to spiraling loses. – TechCrunch