Uber recently sold its food delivery business, Uber Eats, to local rival Zomato in an all stock deal.
While the companies did not give out specific details about the size of the deal, industry experts estimate it to be around $300-350 million.
Uber will acquire a 9.99 per cent ownership in Zomato and the deal emphasizes the efforts of Uber to cut down on its loss making ventures.
Uber Eats will discontinue all its operations in India and users of the app will now be redirected to the Zomato app.
Post the deal, Deepinder Goyal, the founder of Zomato, “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.”
“I want to assure Uber Eats India users that their user experience won’t be compromised in any way – if at all, the scale gives us higher density to make our deliveries faster. With Zomato, you’ll realise that we share a common love for great food,” he added.
Zomato, founded in 2010, is a restaurant review, restaurant discovery, and food delivery platform that operates across 24 nations across the world. Currently, it serves around 70 million users each month.
In sharp contrast, Uber Eats was launched in 2017 but had made massive strides in the food delivery space in India, which is a fiercely competitive market.
With this deal, Zomato now captures around 50 to 55 per cent of the food delivery market in India.
Uber Eats India is now Zomato. Here’s to better food for more people, and new beginnings.
— Deepinder Goyal (@deepigoyal) January 21, 2020
The deal also comes close on the heels of Zomato raising $150 million from Ant Financial, an affiliate of Alibaba, at a valuation of around $3 billion.
Will the combined Uber Eats-Zomato venture become the undisputed leader of food delivery in India, beating its other rival Swiggy? What do you think? Let us know your views in the comments section below.0