Foodpanda, the restaurant delivery service backed by Rocket Internet, has laid off about 300 of its employees in its Indian unit. This means Foodpanda India, which launched in 2012, has lost 15 percent of its workforce.
The company has been hit with competition from Zomato, which began as a restaurant guide but started offering deliveries in February, as well as a host of new “hyperlocal” startups which focus on making quick deliveries from nearby businesses to homes and offices.
In India, Foodpanda is currently available in about 200 cities and has a total of 12,000 restaurants on its platform, which lets customers place food orders through a smartphone app and website. The company, which has raised about $310 million so far from investors including Goldman Sachs, expanded rapidly into 40 countries after its launch in 2012, but has faced setbacks, including accusations that Foodpanda’s focus on growth in India has outstripped its ability to manage it business properly and the sale of its Vietnam unit to Vietnammm, a competitor, earlier this month.
Foodpanda is not the only food delivery startup in India, however, to suffer from an increasingly crowded playing field. Competitors like SpoonJoy, Dazo, and Langhar have also reduced or shut down local operations.
In a press statement, Foodpanda India claims the layoffs resulted from a more streamlined management process, which means tasks like filling in menus and making sure restaurant opening hours are correct are now automated.
Chief executive officer Saurabh Kochhar said “The year 2015 has been an active and productive one for us. Being the pioneers and leaders of this industry, we encountered situations first and had to adapt and find solutions keeping customer experience at the core. While we continued to invest in processes and technology we also had to take some difficult decisions but we believe them to be necessary steps on our path to become sustainable and profitable within the targeted timeline.”