Online food ordering startup Foodpanda is revoking registrations of over
500 restaurants every month as it aims to stabilize operations hit by
frenetic growth and upheaval in top management.
The company-- backed by German incubator Rocket Internet—has been under fire for alleged falsification of orders by restaurants on its network, even as its Berlin-based parent is actively looking to divest its stake according to people who briefed on the developments.
"It would be an anomaly to say our database is 100% clean now. We are 99% clean," said Saurabh Kochhar, chief executive of Foodpanda, who took charge in January this year, following the acquisition of TastyKhana in November 2014. Since then, Kochhar claims the company has doubled the number of restaurants on its platform to 12,000. Every month the company is adding 2,000 additional restaurants.
"There is always 1% of vendors, sellers, restaurants and drivers in e-commerce industry who try and game the system," he said.
Kochhar told that the "investors are solidly behind the company."
Foodpanda which has raised $210 million in funding this year from its parent, was under fire for irregularities in operations at some restaurants on its platform. The issues raised include misusing discount offers and creating fake orders.
The problem, according to people aware of the developments at Foodpanda, were caused when restaurants were listed without physical verification.
"For e-commerce businesses in India it's very important to verify a listed vendor in person," said one of the sources quoted above.
Kochhar claims to have now installed systems which detect IP address and location of restaurants if they try to book their own orders. "We first counsel and warn them, if they repeat the behaviour, we ban them," he said. Foodpanda has also set up a quarterly audit by a top consulting firm to check anomalies. Kochhar said that he deactivates anywhere from 500 to 1,000 restaurants a month as part of the clean-up drive.
As part of speedy growth strategy Foodpanda had acquired food tech startups JustEat and TastyKhana, within a few months of each other.
Since January, the company has grown from 200 employees to over 2,000 even as a number of top managers of have quit.
The growth pangs and operational issues faced by the company--one of the largest players in the online food ordering space -- has put a question mark on viability of the smaller players in the sector, which have together raised an estimated $100 million in venture capital funding this year.
The company-- backed by German incubator Rocket Internet—has been under fire for alleged falsification of orders by restaurants on its network, even as its Berlin-based parent is actively looking to divest its stake according to people who briefed on the developments.
"It would be an anomaly to say our database is 100% clean now. We are 99% clean," said Saurabh Kochhar, chief executive of Foodpanda, who took charge in January this year, following the acquisition of TastyKhana in November 2014. Since then, Kochhar claims the company has doubled the number of restaurants on its platform to 12,000. Every month the company is adding 2,000 additional restaurants.
"There is always 1% of vendors, sellers, restaurants and drivers in e-commerce industry who try and game the system," he said.
Kochhar told that the "investors are solidly behind the company."
Foodpanda which has raised $210 million in funding this year from its parent, was under fire for irregularities in operations at some restaurants on its platform. The issues raised include misusing discount offers and creating fake orders.
The problem, according to people aware of the developments at Foodpanda, were caused when restaurants were listed without physical verification.
"For e-commerce businesses in India it's very important to verify a listed vendor in person," said one of the sources quoted above.
Kochhar claims to have now installed systems which detect IP address and location of restaurants if they try to book their own orders. "We first counsel and warn them, if they repeat the behaviour, we ban them," he said. Foodpanda has also set up a quarterly audit by a top consulting firm to check anomalies. Kochhar said that he deactivates anywhere from 500 to 1,000 restaurants a month as part of the clean-up drive.
As part of speedy growth strategy Foodpanda had acquired food tech startups JustEat and TastyKhana, within a few months of each other.
Since January, the company has grown from 200 employees to over 2,000 even as a number of top managers of have quit.
The growth pangs and operational issues faced by the company--one of the largest players in the online food ordering space -- has put a question mark on viability of the smaller players in the sector, which have together raised an estimated $100 million in venture capital funding this year.
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