Published: Tue, January 21, 2020
Markets | By Otis Pena

Uber Eats sells Indian business to local rival Zomato

Uber Eats sells Indian business to local rival Zomato

Uber has also reached out to its customers via the app with a message: "We have announced today that Zomato has acquired Uber Eats in India".

Uber has sold its food delivery service in India to local rival Zomato in hopes of cutting losses amid stiff competition for the South Asian market.

In a blog post, Zomato Founder Deepinder Goyal assured Uber Eats India users that their user experience won't be compromised in any way.

Uber Eats' India operations contributed just 3% of gross bookings for the business globally in the first nine months of previous year, while accounting for a quarter of its adjusted operating losses, the company said.

"We have been very impressed by Zomato's ability to grow rapidly in a capital-efficient manner and we wish them continued success", he added.

Uber Eats which was launched in 2017 in India, had about 26,000 restaurant partners and garnered about 12% of the market, sources said. The company, which was once seen as a major competitor to Zomato and Swiggy, started struggling in India's hyper-competitive market.

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Uber will offload the business in return for 9.99% of the Indian start-up, maintaining a foothold in one of the world's fastest-growing internet arenas, the companies said in a statement.

Zomato has acquired Uber Eats for around Rs 2,485 crore ($350 million) in an all-stock deal. This deal will not only help Uber offload some of its losses but also give Zomato a slight edge over Swiggy-the current market leader in terms of daily order count.

There is no denying the value the online food delivery platforms have brought to these restaurants. And you can still use Uber Eats if you're travelling outside India.

Uber Eats in India accounted for 3 percent of the business' gross bookings globally, but more than a quarter of its adjusted EBITDA loss in the first three quarters of 2019, Uber said.

Zomato and Swiggy are in merger talks.

Zomato has operations across 24 countries and serves more than 70 million users every month. Media reports suggest that the discussions were getting serious, but fell apart due to differences in valuation and other legal and taxation issues.

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