Zomato Acquires Uber Eats For Nearly Rs 2,500 Crore In An All-Stock Deal

Uber Eats in India will discontinue operations and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform.

Uber sells India food business to local rival Zomato as it moves to cut losses / Image: Twitter

New Delhi: In a major announcement, Zomato on Tuesday said that it has acquired Uber Eats India in an all-stock transaction, which gives Uber 9.99% ownership in Zomato. Uber Eats in India will discontinue operations and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform. As per agencies, the deal is in the range of over $350 million or nearly Rs 2,500 crore. “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, ” Deepinder Goyal, Founder and CEO, Zomato said. “We entered food delivery in India in 2017 and today is when our journey takes a different route. Zomato has acquired Uber Eats in India and we'll no longer be available here with immediate effect. We wish all our users more good times with great food on the road ahead,” Uber Eats tweeted after the development.

We entered food delivery in India in 2017 and today is when our journey takes a different route. Zomato has acquired Uber Eats in India and we'll no longer be available here with immediate effect. We wish all our users more good times with great food on the road ahead pic.twitter.com/WEbJNaJY8M

— Uber Eats India (@UberEats_IND) January 21, 2020

Uber started its food delivery service in India around mid-2017, but has not been able to scale up in the face of big players like Zomato and Swiggy. It currently has nearly 26,000 restaurants listed on its platform from over 40 cities. Dara Khosrowshahi, CEO of Uber, said: “Our Uber Eats team in India has achieved an incredible amount over the last two years, and I couldn’t be prouder of their ingenuity and dedication.” “India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader. We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success,” he said. According to company sources, for the first three quarters of 2019, "our Uber Eats business comprised 3 per cent of our global Eats gross bookings, but was more than 25 per cent of our global Eats Segment Adjusted EBITDA losses". The market is piping hot as according to a recent study by business consultancy firm Market Research Future, the online food ordering market in India is likely to grow at over 16 per cent annually to touch $17.02 billion by 2023. On January 10, Zomato had announced that it has secured $150 million in fresh funding from Ant Financial, a subsidiary of China-based giant Alibaba. (additional inputs from IANS)