(Image Source: The Economic Times)
Ola Group has temporarily halted operations of its food delivery arm, Ola Foods, marking yet another retreat from the competitive food delivery market. The decision comes as the company undergoes a major restructuring to focus on its struggling core electric vehicle business, Ola Electric, which continues to face mounting financial and operational challenges.
The food service operations have disappeared from Ola’s ride-hailing app in recent days, and customers attempting to place orders through the platform or the government-backed Open Network for Digital Commerce are unable to do so. The cloud kitchen business, which operated under various in-house brands including Khichdi Experiment, Biryani Experiment, and Paratha Experiment, has simply stopped accepting new orders across all channels. According to sources familiar with the matter, the pause is temporary while Ola reevaluates its strategic direction. An internal source told media outlets that the company is “re-evaluating plans and working on the business plan.” However, uncertainty remains about whether Ola intends to revive the food delivery business or exit the segment entirely.
This marks the latest chapter in Ola’s messy track record with diversification attempts. The company first launched Ola Cafe back in 2015, which shut down after failing to gain any real traction. It then acquired food delivery startup Foodpanda in 2017 but shut that down in 2019. In 2022, the company tried to integrate food delivery with its quick-commerce venture before shifting strategies again. This pattern suggests that Ola’s ventures outside its core ride-hailing business have consistently struggled to find sustainable footing in India’s fiercely competitive consumer services landscape.
When Core Business Becomes a Major Problem
The real story behind the food business pause lies in the catastrophic deterioration happening at Ola Electric Mobility Limited. The listed entity has seen its stock price collapse by more than 75 percent since its August 2024 IPO debut. The company went public at a valuation of around 7 billion dollars but has since plummeted to around 1.25 billion dollars, representing one of India’s most dramatic new-age company collapses.
The operational numbers paint an even grimmer picture than the stock price. In its latest quarterly results, the company reported a staggering 57 percent year-on-year revenue decline alongside losses that more than doubled. Sales volume declined by 47 percent in recent quarters, while the company cut its full-year outlook by approximately 40 percent. Its market share in the electric scooter segment has nosedived from around 46 percent in June 2024 to just 11.5 percent by October 2025.
What has been particularly devastating is Ola’s complete inability to compete once competitors actually got serious about electric vehicles. Bajaj Auto, TVS Motor, and Hero MotoCorp have all rapidly expanded their electric vehicle portfolios with far superior distribution networks and customer service infrastructure. Even Ather Energy has surpassed Ola in recent quarterly revenues. On top of all this, customers have reported persistent quality issues including frequent breakdowns and extended service delays, which has further eroded the company’s brand reputation.
Financial stress has become really acute across the entire organization. Ola Electric is struggling to secure fresh funding despite its high-profile IPO just months ago. The company has approached multiple investors for a proposed 1,500 crore rupees equity raise, but most have declined citing the deteriorating financial performance. Additionally, lenders have shown reluctance to support a separate 1,700 crore rupees debt plan that was approved by the company’s board. This funding freeze has forced some really difficult choices about where to allocate remaining capital.
Consolidation as a Survival Strategy
The pause on food delivery represents a broader restructuring across the Ola Group portfolio where founder Bhavish Aggarwal has been systematically reassessing non-core ventures. Over the past two years, the conglomerate has already exited or significantly scaled down operations including its used cars platform Ola Cars and its quick-commerce offering Ola Dash. The message is pretty clear: with cash burn accelerating and revenues declining at the core business, the company must concentrate all available resources on stabilizing Ola Electric before it becomes completely unsalvageable.
Industry analysts have warned that without immediate action to address fundamental volume and quality issues at Ola Electric, the company risks facing a full-blown crisis that could threaten its entire group structure. The pause on food delivery is less about strategic repositioning and more about financial survival. For a company that once envisioned itself as a super-app competitor taking on everyone, the reality of having to cut back to basics represents a pretty humbling turn of events.
