Zomato announced on Tuesday, Uber has sold Uber Eats, online food-ordering business in India to Zomato in exchange for a 9.99% stake, in the startup backed by Alibaba affiliate Ant Financial. Uber Eats would discontinue operations and direct restaurants, delivery partners and users to the Zomato platform from January 21.
The deal value is at around $355 million (around Rs 2,527 crore), according to Zomato’s most recent valuation. My Office Hub could not independently verify the report.
“We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across India. This acquisition significantly strengthens our position in the category,” said Deepinder Goyal, Founder and CEO of Zomato.
“The competition in this space is going to continue to be intense, and the food delivery category is still very small compared to the overall foodservice market in India,” He added.
Zomato says it covers over 1.5 million restaurants across 24 countries and serves more than 70 million users every month.
“India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business,” said Dara Khosrowshahi, Uber’s CEO.
According to report, Uber Eats in India generated 3 per cent of our global Eats gross bookings over the first three quarters of 2019 and accounted for more than 25 per cent of our global Eats Segment Adjusted EBITDA losses.
Zomato received 650,000 daily orders in India in 2018, second behind Swiggy, which received 800,000 orders on a daily basis. Uber Eats came in third with 150,000 orders per day, according to Statista
The deal could leave Uber out of a significant chunk of the food delivery market. Asia’s market has become the largest for online food delivery in the world, with over $45 billion in revenue in 2018. India holds the second-largest percentage of that market share at 13.2%, after China’s 73%, according to an October report from Frost & Sullivan.