Uber sells loss-making online food ordering business in India to Zomato
New Delhi: Uber Technologies Inc has sold its loss-making online food-ordering business in India, Uber Eats, to Zomato in exchange for a 9.99 per cent stake in the Indian food ordering platform.
Uber Eats in India will discontinue operations and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform, effective Tuesday, the two companies said in statements.
Neither company gave financial details.
Started in 2017, Uber's food-delivery business in India has lagged market leaders Nasper-based Swiggy and Jack Ma's Ant Financial-backed Zomato. Another player Foodpanda, which was acquired in 2017 by ANI Technologies Ltd that also owns ride-hailing app Ola, too struggled to consolidate its user base.
"We have acquired Uber Eats India and with this development, we are the undisputed market leaders in the food delivery category in India," Zomato founder Deepinder Goyal wrote in a blog. "Through this deal, Uber Eats India users now become Zomato users."
Zomato is a restaurant review, restaurant discovery, food delivery and dining out transactions platform that provides information for over 1.5 million restaurants across 24 countries and serves more than 70 million users every month.
Goyal, who is also the CEO of Zomato, said: "We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category."
Dara Khosrowshahi, CEO of Uber, said India remains "an exceptionally important market" to Uber and the firm will continue to invest in growing local rides business.
"We have been very impressed by Zomato's ability to grow rapidly in a capital-efficient manner," he said. "Our Uber Eats team in India has achieved an incredible amount over the last two years."
Zomato's orders per month may go up by as much as 10 million to 50 million after the deal.
The deal marks possible consolidation in the highly competitive and price-sensitive online food delivery market where most players are in the red.
In a regulatory filing to the BSE, Info Edge (India) - a lead shareholder of Zomato and owner of Naukri.com brand - said its shareholding in the food delivery startup will stand reduced to about 22.71 per cent upon closing of the transaction.
The deal comes days after Zomato had raised USD 150 million in funding from existing investor Ant Financial, an Alibaba affiliate, at a USD 3 billion valuation.